Hormel Foods (HRL) Q2 2025 earnings summary

Executive summary

• Achieved solid organic top-line growth in Q2 2025, with net sales of $2.9 billion and organic growth of 1% year-over-year, led by consumer-focused, protein-centric products and strong performance in Foodservice and International.

• Diluted EPS was $0.33; adjusted diluted EPS was $0.35, both in line with expectations but down from the prior year.

• Maintained leadership in retail, with Planters, Applegate, JENNIE-O, and SPAM driving performance; international growth was especially strong in China and exports.

• Transform and Modernize (T&M) Initiative continues to deliver operational and financial benefits, with non-recurring costs excluded from adjusted results.

• Cash flow from operations was $56 million for the quarter, impacted by inventory build ahead of summer demand.

Financial highlights

• Q2 2025 net sales were $2.90 billion (+0.4% year-over-year); organic net sales rose 1%.

• Gross profit margin was 16.7%, reflecting higher commodity input costs, partially offset by T&M savings.

• Adjusted diluted EPS for Q2 was $0.35, compared to $0.38 in the prior year.

• Capital expenditures for the quarter were $75 million, focused on capacity and technology; FY25 guidance is $275–$300 million.

• Ended the quarter with $2.9 billion in debt and $670 million in cash and equivalents.

Outlook and guidance

• Fiscal 2025 organic net sales growth outlook narrowed to 2–3%; net sales expected at $12.0–$12.2 billion.

• Adjusted diluted EPS guidance narrowed to $1.58–$1.68 for FY25.

• Expect strong second-half growth, with each segment delivering top- and bottom-line gains; advertising investments to increase significantly in H2.

• T&M initiative expected to deliver $100–$150 million in incremental benefits in FY25.

• FY25 capital expenditures projected at $275–$300 million.