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Q4 net sales rose 1.5% while adjusted EPS beat estimates despite a year-over-year decline.
Retail and Foodservice sales grew, though profits fell on input cost pressures and charges.
International sales and profit declined, weighed by lower exports and a non-cash impairment.
Hormel Foods Corporation ((HRL - Free Report) ) reported fourth-quarter fiscal 2025 results, with the top line increasing year over year while missing the Zacks Consensus Estimate. The bottom line declined year over year but beat the consensus mark.
Hormel Foods posted adjusted earnings of 32 cents per share, which beat the Zacks Consensus Estimate of 30 cents. The bottom line decreased from 42 cents reported in the year-ago quarter.
Hormel Foods Corporation Price, Consensus and EPS Surprise
Net sales of $3,185.7 million increased 1.5% from $3,138.1 million reported in the year-ago quarter. The metric missed the consensus mark of $3,203 million. Volumes decreased 1.8% in the reported quarter.
HRL’s Quarterly Results: Key Metrics & Insights
Hormel Foods’ gross profit was $444.8 million, down from $521.2 million reported in the year-ago quarter.
Adjusted selling, general and administrative expenses were $220.2 million for the quarter, a decrease from $226.1 million in the year-ago period.
Adjusted operating income was $245.3 million, a decrease from $307.9 million in the same quarter last year. Adjusted operating margin was 7.7%, down from 9.8% reported in the year-ago quarter.
HRL Provides Q4 Revenues & Profit Insights by Segment
Net sales in the Retail unit increased 0.8% year over year to $1,922.8 million, with volumes gaining 0.3%, driven by strong contributions from the turkey portfolio, Planters snack nuts and Applegate products. These gains were partially offset by the strategic discontinuation of certain private-label snack nut offerings. The consensus estimate for segment sales was pegged at $1,945 million.
Segment profit decreased 69.7%, due to non-cash impairment charges. On an adjusted basis, segment profit decreased 23%, as net sales growth was more than offset by input cost pressures, largely stemming from elevated commodity markets.
Net sales in the Foodservice segment increased 4% to $1,088.2 million, while the consensus mark was $1,071 million. The organic net sales rose 6% and volumes declined 5.4%. Growth was broad-based across the segment, driven by strong performance in the customized solutions business, branded bacon offerings, branded pepperoni, premium prepared proteins and the Jennie-O turkey portfolio.
Segment profit declined 12.9%, due to the impacts of a chicken-product recall and rising input costs, driven by elevated commodity markets. The Foodservice segment continued to benefit from its extensive range of solutions-based products, direct-selling organization and diverse channel presence during the fiscal fourth quarter.
Net sales in the International unit decreased 5.6% year over year to $174.7 million, whereas volumes decreased 8.2%, reflecting lower fresh pork exports and competitive pressures in Brazil. These declines were partially offset by growth in SPAM luncheon meat and the refrigerated portfolio. The China market continued to contribute to both volume and net sales growth during the quarter. The consensus estimate for segment sales was pegged at $188 million.
Segment profit declined significantly, due to a non-cash impairment related to a minority investment in Indonesia. On an adjusted basis, segment profit declined 7%, primarily due to commodity input cost pressures and continued softness in Brazil.
Hormel Foods’ Financial Health Snapshot
This Zacks Rank #4 (Sell) company ended the quarter with cash and cash equivalents of $670.7 million and total long-term debt (excluding current maturities) of $2,850.8 million. In the fiscal fourth quarter, cash flow from operations was $322.9 million.
Hormel Foods prioritizes returning capital to its shareholders. The company returned nearly $633 million in fiscal 2025 to its shareholders via dividends.
What to Expect From HRL in the Future?
Hormel Foods expects fiscal 2026 net sales to be between $12.2 billion and $12.5 billion, supported by expected organic net sales growth of 1% to 4%. The company anticipates adjusted earnings per share (EPS) to be in the range of $1.43 to $1.51, with growth of 4% to 10%.
Hormel Foods targets capital expenditures to be in the range of $260 million to $290 million, and expects depreciation and amortization expenses of approximately $280 million in fiscal 2026.
HRL stock has lost 6.7% in the past three months compared with the industry’s decline of 20.1%.
Image Source: Zacks Investment Research
Stocks to Consider
Village Farms International, Inc. ((VFF - Free Report) ) produces, markets and distributes greenhouse-grown tomatoes, bell peppers, cucumbers and mini-cukes in North America. It sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Village Farms’ current fiscal-year earnings indicates growth of 165.6% from the prior-year levels. VFF delivered a trailing four-quarter earnings surprise of 155.6%, on average.
The Chefs' Warehouse, Inc. ((CHEF - Free Report) ) distributes specialty food and center-of-the-plate products in the United States, the Middle East and Canada. It currently flaunts a Zacks Rank of 1. CHEF delivered a trailing four-quarter earnings surprise of 14.7%, on average.
The Zacks Consensus Estimate for The Chefs' Warehouse’s current fiscal-year sales and earnings indicates growth of 8.1% and 29.3%, respectively, from the prior-year levels.
Lamb Weston Holdings, Inc. ((LW - Free Report) ) engages in the production, distribution and marketing of frozen potato products in the United States, Canada, Mexico and internationally. It carries a Zacks Rank #2 (Buy) at present. Lamb Weston delivered a trailing four-quarter earnings surprise of 16%, on average.
The Zacks Consensus Estimate for Lamb Weston's current fiscal-year sales indicates growth of 2.4% from the prior-year levels.
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Hormel Foods Q4 Earnings Beat Estimates, Sales Increase Y/Y
Key Takeaways
Hormel Foods Corporation ((HRL - Free Report) ) reported fourth-quarter fiscal 2025 results, with the top line increasing year over year while missing the Zacks Consensus Estimate. The bottom line declined year over year but beat the consensus mark.
Hormel Foods posted adjusted earnings of 32 cents per share, which beat the Zacks Consensus Estimate of 30 cents. The bottom line decreased from 42 cents reported in the year-ago quarter.
Hormel Foods Corporation Price, Consensus and EPS Surprise
Hormel Foods Corporation price-consensus-eps-surprise-chart | Hormel Foods Corporation Quote
Net sales of $3,185.7 million increased 1.5% from $3,138.1 million reported in the year-ago quarter. The metric missed the consensus mark of $3,203 million. Volumes decreased 1.8% in the reported quarter.
HRL’s Quarterly Results: Key Metrics & Insights
Hormel Foods’ gross profit was $444.8 million, down from $521.2 million reported in the year-ago quarter.
Adjusted selling, general and administrative expenses were $220.2 million for the quarter, a decrease from $226.1 million in the year-ago period.
Adjusted operating income was $245.3 million, a decrease from $307.9 million in the same quarter last year. Adjusted operating margin was 7.7%, down from 9.8% reported in the year-ago quarter.
HRL Provides Q4 Revenues & Profit Insights by Segment
Net sales in the Retail unit increased 0.8% year over year to $1,922.8 million, with volumes gaining 0.3%, driven by strong contributions from the turkey portfolio, Planters snack nuts and Applegate products. These gains were partially offset by the strategic discontinuation of certain private-label snack nut offerings. The consensus estimate for segment sales was pegged at $1,945 million.
Segment profit decreased 69.7%, due to non-cash impairment charges. On an adjusted basis, segment profit decreased 23%, as net sales growth was more than offset by input cost pressures, largely stemming from elevated commodity markets.
Net sales in the Foodservice segment increased 4% to $1,088.2 million, while the consensus mark was $1,071 million. The organic net sales rose 6% and volumes declined 5.4%. Growth was broad-based across the segment, driven by strong performance in the customized solutions business, branded bacon offerings, branded pepperoni, premium prepared proteins and the Jennie-O turkey portfolio.
Segment profit declined 12.9%, due to the impacts of a chicken-product recall and rising input costs, driven by elevated commodity markets. The Foodservice segment continued to benefit from its extensive range of solutions-based products, direct-selling organization and diverse channel presence during the fiscal fourth quarter.
Net sales in the International unit decreased 5.6% year over year to $174.7 million, whereas volumes decreased 8.2%, reflecting lower fresh pork exports and competitive pressures in Brazil. These declines were partially offset by growth in SPAM luncheon meat and the refrigerated portfolio. The China market continued to contribute to both volume and net sales growth during the quarter. The consensus estimate for segment sales was pegged at $188 million.
Segment profit declined significantly, due to a non-cash impairment related to a minority investment in Indonesia. On an adjusted basis, segment profit declined 7%, primarily due to commodity input cost pressures and continued softness in Brazil.
Hormel Foods’ Financial Health Snapshot
This Zacks Rank #4 (Sell) company ended the quarter with cash and cash equivalents of $670.7 million and total long-term debt (excluding current maturities) of $2,850.8 million. In the fiscal fourth quarter, cash flow from operations was $322.9 million.
Hormel Foods prioritizes returning capital to its shareholders. The company returned nearly $633 million in fiscal 2025 to its shareholders via dividends.
What to Expect From HRL in the Future?
Hormel Foods expects fiscal 2026 net sales to be between $12.2 billion and $12.5 billion, supported by expected organic net sales growth of 1% to 4%. The company anticipates adjusted earnings per share (EPS) to be in the range of $1.43 to $1.51, with growth of 4% to 10%.
Hormel Foods targets capital expenditures to be in the range of $260 million to $290 million, and expects depreciation and amortization expenses of approximately $280 million in fiscal 2026.
HRL stock has lost 6.7% in the past three months compared with the industry’s decline of 20.1%.
Image Source: Zacks Investment Research
Stocks to Consider
Village Farms International, Inc. ((VFF - Free Report) ) produces, markets and distributes greenhouse-grown tomatoes, bell peppers, cucumbers and mini-cukes in North America. It sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Village Farms’ current fiscal-year earnings indicates growth of 165.6% from the prior-year levels. VFF delivered a trailing four-quarter earnings surprise of 155.6%, on average.
The Chefs' Warehouse, Inc. ((CHEF - Free Report) ) distributes specialty food and center-of-the-plate products in the United States, the Middle East and Canada. It currently flaunts a Zacks Rank of 1. CHEF delivered a trailing four-quarter earnings surprise of 14.7%, on average.
The Zacks Consensus Estimate for The Chefs' Warehouse’s current fiscal-year sales and earnings indicates growth of 8.1% and 29.3%, respectively, from the prior-year levels.
Lamb Weston Holdings, Inc. ((LW - Free Report) ) engages in the production, distribution and marketing of frozen potato products in the United States, Canada, Mexico and internationally. It carries a Zacks Rank #2 (Buy) at present. Lamb Weston delivered a trailing four-quarter earnings surprise of 16%, on average.
The Zacks Consensus Estimate for Lamb Weston's current fiscal-year sales indicates growth of 2.4% from the prior-year levels.