Hormel Foods 2025 Q4 Earnings Net Loss Amid EPS Beat and Guidance Raise

Hormel Foods (HRL) reported Q4 2025 earnings with a net loss but exceeded adjusted EPS estimates while providing optimistic 2026 guidance. The company’s revenue grew modestly, and strategic restructuring plans were outlined to address margin pressures.

Revenue

Hormel Foods reported total revenue of $3.19 billion for Q4 2025, reflecting a 1.5% year-over-year increase. The Retail segment led with $1.92 billion in sales, driven by core brands and portfolio optimization. Foodservice revenue reached $1.09 billion, supported by demand for branded solutions and turkey products. International sales contributed $174.65 million, though growth was tempered by competitive pressures in key markets.

Earnings/Net Income

The company swung to a GAAP net loss of $56.20 million ($0.10 per share) in Q4 2025, a 125.6% decline from a $219.96 million profit in 2024 Q4. Adjusted EPS, however, improved to $0.32, outperforming estimates. Despite the loss, Hormel has maintained profitability for over 20 years in this quarter, highlighting operational resilience amid cost challenges.

Post-Earnings Price Action Review

The strategy of buying HRL when it beats revenue and holding for 30 days resulted in a significant loss of -49.90%, underperforming the benchmark by 135.79%. With a maximum drawdown of 0.00% and a Sharpe ratio of -0.57, the strategy indicated high risk and a sure loss.

CEO Commentary

Interim CEO Jeffrey Ettinger acknowledged fiscal 2025 challenges, including input costs and operational setbacks, but emphasized organic net sales growth of 2% driven by the "Protein Forward" portfolio. Strategic priorities for 2026 include cutting 250 corporate/sales positions and reinvesting savings into innovation and efficiency programs.

Guidance

Hormel projected 2026 organic net sales growth of 1% to 4% and adjusted EPS of $1.43 to $1.51. Key drivers include pricing actions to offset elevated pork costs and gross margin expansion through the "Transform and Modernize" initiative. Q1 earnings are expected to remain pressured but full-year growth is achievable.

Additional News

1. Legal Investigation: The Schall Law Firm announced an investigation into Hormel for potential securities law violations, citing a Wall Street Journal article that highlighted forecast cuts, price pressures, and leadership changes.

2. Restructuring: Hormel announced a corporate restructuring plan, including 250 job cuts, to reduce costs and reinvest in brand capabilities.

3. Dividend Raise: The company increased its quarterly dividend by 0.9% to $0.2925 per share, maintaining its 60-year consecutive dividend growth streak.

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