Hormel Foods, a multinational manufacturer and marketer of consumer-branded food and meat products, issued decent financials for its fiscal 2015 fourth quarter ended Oct 25. Revenues decreased 5.6% y-o-y to $2.4 bn due to the avian influenza outbreak that posed several supply-chain challenges, and stronger dollar. Sales in the Grocery Products segment were up 4.3% to $422.6 mn, while Jennie-O Turkey Store segment revenues fell 17.6% to $420.3 mn. The Specialty Foods revenues declined 2.8% to $269.9 mn, and Refrigerated Foods revenues decreased 5.1% to $1.15 bn. At the same time, operating income grew 14.9% to $308.9 mn, reflecting lower input costs as well as expense discipline, and operating margin expanded 230 basis points to 12.9%. Adjusted earnings per share jumped 17.5% to 74 cents and surpassed consensus estimate of 68 cents. Exiting FQ4, Hormel Foods had cash and cash equivalents of $347.2 mn, while long-term debt (excluding current maturities) stood at $250 mn. In fiscal 2015, the company generated operating cash flow of $992 mn, up 32.8% y-o-y. Capital expenditures were $125.6 mn, and dividends amounted to $250.8 mn, up 23.5% y-o-y. Hormel Foods looks with optimism into fiscal 2016 and expects a renewed revenue growth due to a mitigating impact of Avian Influenza, higher Applegate sales and increased demand for Muscle Milk, Spam and Skippy products. Favorable input pricing and strategic cost-saving programs should continue to support the company’s widening margins. Taking these factors into account, Hormel Foods management set its fiscal 2016 EPS guidance range at $2.85-2.95, compared with $2.64 per share in fiscal 2015. The upcoming fiscal year would also witness the company’s 50th annual dividend increment program, with annual dividend of $1.16 per share reflecting a 16% y-o-y increase. So, I continue to view Hormel Foods as a well-positioned company in the food sector with a strong portfolio of brands, consistent earnings growth, strong cash flow and a solid balance sheet. FQ4 earnings beat helped Hormel Foods' stock to brake a $69 resistanse level. Medium-term target price is $80. $HRL, Hormel Foods Corporation / 1440