Hormel Foods (HRL) investor relations material

Executive summary

• Fiscal 2025 net sales reached $12.1 billion, with 2% organic growth year-over-year, driven by all three segments and leading brands, despite significant earnings shortfall and margin pressures from elevated input costs and operational incidents.

• Four consecutive quarters of organic net sales growth were achieved, with Planters returning to growth after prior disruptions.

• The Transform & Modernize initiative delivered value through over 120 projects, including facility closures, distribution expansion, and a 9% reduction in corporate and sales positions.

• Strategic focus for 2026 includes consumer obsession, brand expansion, portfolio reshaping, AI adoption, and operational simplification.

Financial highlights

• Operating income for 2025 was $719 million; adjusted operating income just over $1 billion.

• Operating margin was 5.9%, adjusted operating margin 8.4%.

• Full-year diluted EPS was $0.87; adjusted diluted EPS was $1.37. Q4 diluted loss per share was $0.10; adjusted Q4 EPS was $0.32.

• Cash flow from operations was $845 million; year-end inventories at $1.7 billion, up $171 million.

• Returned $633 million to shareholders via dividends, marking 60 consecutive years of increases.

Outlook and guidance

• Fiscal 2026 net sales expected between $12.2 billion and $12.5 billion, with organic net sales growth of 1%-4%.

• Adjusted operating income forecasted at $1.06 billion to $1.12 billion, up 4%-10%; adjusted diluted EPS expected in the range of $1.43 to $1.51.

• Q1 2026 earnings expected to decline year-over-year due to timing of pricing, input costs, and lingering Q4 impacts; recovery expected to accelerate in later quarters.

• Capital expenditures projected at $260 million to $290 million; effective tax rate of 21.5%-22.5%.

• Each segment expected to deliver top line and profit growth in 2026.