Hormel Foods Corp
Q2 2025 Earnings
Market Reaction
S&P 500 over the same 30 days: +5.12%.
Did HRL Beat Earnings? Q2 2025 Results
Hormel Foods delivered a modest earnings beat in its fiscal second quarter, posting adjusted diluted EPS of $0.35 against a consensus estimate of $0.34, a 2.16% beat, even as revenue of $2.90 billion came in fractionally below expectations and rose just 0.4% year over year. The quarter's headline story was a tension between operational progress and persistent demand headwinds, with retail and foodservice segment volumes under pressure from reduced raw material shipments and lower third-party production, offsetting 1% organic top-line growth. Transform and Modernize initiative efficiencies provided meaningful tailwinds to retail segment profit, helping cushion margin pressures that weighed on the foodservice and international segments. Operating cash flow fell sharply to $56.44 million from $236.15 million a year ago, driven by a $203.83 million working capital headwind. Looking ahead, Hormel narrowed its fiscal 2025 adjusted EPS outlook to $1.58 to $1.68 and raised the floor of its net sales guidance to $12.00 billion to $12.20 billion, with management signaling a meaningful ramp in advertising investment in the back half of the year.
- Transform and Modernize (T&M) initiative delivering operational efficiencies and cost savings
- Strong growth in Mexican foods portfolio with double-digit consumption growth in Wholly and Herdez guacamole
- Planters brand exceeded volume and net sales expectations
- Strong demand for Jennie-O lean ground turkey
- Double-digit volume and net sales growth in International exports
- Broad-based organic net sales growth in Foodservice segment
- Favorable SG&A expenses in Retail segment
“We achieved solid organic top-line growth and delivered second quarter results in line with our expectations. We anticipate strong second half growth led by our range of consumer-focused, protein-centric products. Notably, we expect meaningful contributions from our turkey portfolio, continued momentum in the Planters® brand, growth from our leading positions in the marketplace and ongoing benefits from our Transform and Modernize (T&M) initiative. In the face of a dynamic environment, we remain confident in our portfolio, our strategy and our team.”
Hormel Foods CEO, on the earnings call
Forward Guidance & Outlook
Hormel narrowed its fiscal 2025 outlook. Net sales are now expected in the range of $12.0 billion to $12.2 billion (raised from $11.9–$12.2 billion). Organic net sales growth outlook narrowed to 2%–3%. GAAP diluted EPS expectations narrowed to $1.49–$1.59 (from $1.49–$1.63). Adjusted diluted EPS expectations narrowed to $1.58–$1.68 (from $1.58–$1.72). The company reaffirmed its T&M initiative benefits outlook of $100 million to $150 million year over year. Capital expenditures target remains $275–$300 million. Depreciation and amortization is expected at approximately $265 million. The effective tax rate for fiscal 2025 is expected between 22.0% and 23.0%. Advertising investments are expected to significantly increase in the second half of fiscal 2025 compared to the prior year.
HRL YoY Financials
HRL Revenue by Segment
Figures from SEC filings and company reports. Not investment advice.