Hormel Foods (HRL) Q1 2025 earnings summary

Executive summary

• Net sales for Q1 2025 were $2.99 billion, with organic net sales up 1% year-over-year, driven by value-added brands and sequential recovery in Planters.

• CEO Jim Snee announced his retirement, with a search underway for a successor, emphasizing continuity and strategic focus.

• Navigated turkey supply chain challenges and reaffirmed FY25 net sales and adjusted EPS guidance.

• Segment profit fell 13%, with International up 4% but Retail and Foodservice down 20% and 8%, respectively.

• Advanced strategic priorities: retail growth, foodservice expansion, global presence, and portfolio simplification.

Financial highlights

• Gross profit margin was 15.9%, pressured by higher commodity input costs and supply chain impacts.

• Adjusted diluted EPS was $0.35, down 15% year-over-year; diluted EPS was $0.31.

• Operating cash flow reached $309 million; capital expenditures were $72 million, focused on value-added capacity.

• Net earnings attributable to Hormel Foods were $170.6 million, down 22% from Q1 2024.

• Dividend increased to $1.16 per share annually, marking the 59th consecutive annual increase.

Outlook and guidance

• FY25 organic net sales growth expected at 1–3%, with adjusted diluted EPS guidance of $1.58–$1.72; GAAP EPS revised to $1.49–$1.63 due to the sow operation sale.

• Q2 net sales in Retail expected to be flat; Foodservice to see mid-single-digit organic growth; International to achieve high single-digit growth.

• Full-year advertising expense and capital expenditures projected to increase.

• T&M initiative expected to deliver $100–$150 million in year-over-year benefits.