Hormel Foods 2025 Q2 Earnings Steady Performance as Net Income Declines 5%

Hormel Foods (HRL) reported its fiscal 2025 Q2 earnings on May 28th, 2025. The company delivered results that were in line with expectations, with total revenue slightly increasing by 0.4% to $2.90 billion compared to the same quarter last year. However, the company saw a decline in net income by 5% year-over-year. Hormel adjusted its fiscal 2025 guidance, narrowing its organic net sales growth outlook to a range of 2% to 3% and adjusted diluted EPS expectations to between $1.58 and $1.68.

Revenue
In the second quarter of 2025, Hormel Foods reported total net sales of $2.90 billion. The retail segment contributed $1.78 billion, while the foodservice segment added $936.44 million. International sales accounted for $178.53 million. These figures reflect the company's efforts to maintain steady performance across its various business segments.

Earnings/Net Income
Hormel Foods experienced a decline in EPS, which fell by 5.7% to $0.33 in 2025 Q2 from $0.35 in 2024 Q2. Net income decreased to $179.74 million from $189.21 million in the same period last year. This decline indicates challenges in maintaining profit levels despite stable revenue.

Price Action
Hormel Foods' stock price edged down 0.92% during the recent trading day, decreased 0.33% over the past week, but increased 1.14% month-to-date.

Post-Earnings Price Action Review
The post-earnings strategy of purchasing Hormel Foods shares after their revenue increase and holding for a month proved unprofitable. A backtest revealed a significant loss of 40.06%, with a Sharpe Ratio of -0.68 and a maximum drawdown of 44.29%. This strategy underperformed the benchmark, indicating it was not a viable approach for investors during this period. The poor performance highlights the challenges faced by the company despite positive revenue growth.

CEO Commentary
“We achieved solid organic top-line growth and delivered second quarter results in line with our expectations,” said Jim Snee, President and Chief Executive Officer of Hormel Foods. He highlighted strong anticipated growth in the second half, driven by consumer-focused, protein-centric products, emphasizing expected contributions from the turkey portfolio and ongoing momentum in the Planters® brand. Snee expressed confidence in the company’s strategic initiatives, particularly the Transform and Modernize initiative, which is expected to enhance operational efficiency and profitability despite challenges in the dynamic market environment.

Guidance
Hormel Foods narrowed its fiscal 2025 organic net sales growth outlook to 2% to 3% and adjusted diluted earnings per share expectations to a range of $1.58 to $1.68. The company reaffirmed its goal of achieving $100 million to $150 million in benefits from its Transform and Modernize initiative. Capital expenditures are projected to remain between $275 million and $300 million for the fiscal year.

Additional News
Hormel Foods recently announced the retirement of Scott Aakre, the Group Vice President and Chief Marketing Officer for Retail, who will transition to a board director role at the end of fiscal 2025. In a leadership shift, Jeff Baker, a 35-year company veteran, will succeed Aakre as Group Vice President for Retail Marketing. Additionally, Hormel declared a quarterly dividend of $0.29 per share, payable on August 15, 2025. This ongoing commitment to dividends underscores the company’s dedication to returning value to its shareholders.