LAUREL, MISS. — Weak market prices for products made at the company’s big bird food service plants, reduced demand for chicken at retail grocery stores and inefficiencies related to two hurricanes weighed on fiscal 2018 financials at Sanderson Farms, Inc.
Net income in the year ended Oct. 31 totaled $61,431,000, equal to $2.70 per share on the common stock, down 78% from $279,745,000, or $12.30 per share, in fiscal 2017. Net sales also were lower, falling 3.2% to $3,236,004,000 from $3,342,226,000.
Sanderson Farms experienced a particularly tough fourth quarter in which the company sustained a loss of $43,198,000 on sales of $798,148,000. By comparison, the company earned $72,871,000 on sales of $919,941,000 in the fourth quarter a year ago.
Results for the quarter and the fiscal year reflect a charge of $9.6 million, or approximately 32c per share net of income taxes, in addition to inefficiencies caused by hurricanes Michael and Florence, the company said.
Joe F. Sanderson, chairman and chief executive officer, said during a Dec. 20 conference call with analysts that Sanderson Farms sold a record 4.4 billion lbs of poultry products during fiscal 2018, which compared with 4.22 billion lbs in fiscal 2017.
He said the company also moved its St. Pauls, N.C., plant to full production and continued construction on its new Tyler, Texas, complex.
“While our overall performance in some areas during 2018 was good, we have identified significant opportunities in our operation in areas where we underperformed in 2018,” Mr. Sanderson said. “We start the new year in pretty good shape. Our balance sheet is strong. We started fiscal 2019 debt-free, and the company is well positioned to continue our growth strategy in the future. The new Tyler complex demonstrates our optimism and our confidence in the long-term success of Sanderson Farms and our industry. The new complex will add value for our investors, opportunities for our employees and their communities and more high-quality products for new customers. We are committed to continue our growth beyond Tyler, but we will take this year to work on our operations and sales at our existing facilities.
“Market conditions are challenging as we start the year. But no matter the market conditions, we will continue to focus on those things we can control and manage the others as best we can.”