Hormel Foods Corporation (NYSE: HRL) Q2 2025 Earnings Call | 5/29/2025

Hormel Foods' Q2 2025 earnings call reported solid organic net sales growth of 1% to $2.9 billion, with adjusted diluted EPS of $0.35, meeting expectations. Retail maintained market leadership, with strong performances from Applegate (convenience breakfast and new chicken products), Jennie-O lean ground turkey, and Mexican foods (Herdez salsa and guacamole, plus new El Pastor entrees). Food service outperformed the industry with growth in branded products like Jennie-O and Fontanini hot honey sausage, despite market softness. International saw double-digit export and China growth, driven by innovations like Hormel BBQ Bites. Gross profit margin was 16.7%, impacted by higher commodity costs but aided by the Transform and Modernize (T&M) initiative, which is on track to deliver $100–$150 million in benefits. SG&A dropped 50 basis points, and operating cash flow was $56 million due to intentional inventory buildup for summer demand (Planters, Spam). CapEx was $75 million, with a full-year forecast of $275–$300 million. The company narrowed its 2025 outlook to 2–3% net sales growth and $1.58–$1.68 adjusted EPS, factoring in tariffs (1–2 cents impact), lower investment income, and consumer dynamics. The second half expects strong growth, led by turkey, Planters, and T&M savings, with retail projecting low single-digit, food service mid-single-digit, and international high single-digit sales growth. Key T&M milestones include closing a California dry sausage facility, opening a Memphis distribution center, and advancing the Hormel Production System. Leadership changes included Kevin Myers leading supply chain, Scott Ockrey’s retirement with a board appointment, and Jeff Baker taking over retail marketing in 2026.