Hormel Foods 2025 Q4 Earnings Strong Revenue Growth Amid Significant Net Loss

Hormel Foods reported Q4 2025 results with a 1.5% revenue increase to $3.19 billion, surpassing estimates, but swung to a $0.10-per-share loss from a $0.40 profit in 2024. The company issued optimistic 2026 guidance, projecting organic sales growth of 1%-4% and adjusted EPS of $1.43-$1.51.

Revenue

Hormel Foods’ total revenue rose 1.5% year-over-year to $3.19 billion in Q4 2025, driven by strong performance across its segments. Retail sales led with $1.92 billion, reflecting resilient demand for core brands. Foodservice revenue reached $1.09 billion, bolstered by customized solutions and branded offerings. International sales, though modest, contributed $174.65 million, with exports like SPAM® offsetting challenges in Brazil and Indonesia.

Earnings/Net Income

The company posted a net loss of $56.20 million ($0.10 per share) in Q4 2025, a 125.6% deterioration from a $219.96 million profit the prior year. This marked the first quarterly loss in over two decades, underscoring margin pressures from input costs and operational setbacks.

Price Action

Hormel’s stock fell 3.75% in the latest trading day but gained 12.48% month-to-date.

Post-Earnings Price Action Review

The strategy of buying HRL after a revenue beat and holding for 30 days resulted in a -49.90% return, underperforming the benchmark by 135.79%. With a maximum drawdown of 0.00% and a Sharpe ratio of -0.57, the approach highlighted high risk and poor performance.

CEO Commentary

Interim CEO Jeffrey Ettinger acknowledged 2025’s challenges, including elevated input costs and a fire disrupting peanut butter production. He emphasized progress through the "Transform and Modernize" initiative and a 250-role workforce reduction, positioning Hormel for 2026 growth via innovation and AI-driven efficiency.

Guidance

Hormel expects 2026 organic sales growth of 1%-4% and adjusted EPS of $1.43-$1.51. Key drivers include pricing actions, margin expansion, and restructuring savings. Pork input costs are projected to decline but remain above five-year averages, while beef and nut costs persist as headwinds.

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 on pricing pressures and leadership changes.

2. Workforce Restructuring: Hormel announced a 250-role reduction in corporate and sales positions to reinvest in brands and capabilities.

3. Dividend Increase: The company raised its quarterly dividend by 0.9% to $0.2925 per share, marking its 60th consecutive annual increase.

Guidance

Hormel expects 2026 organic sales growth of 1%-4% and adjusted EPS of $1.43-$1.51. Key drivers include pricing actions, margin expansion, and restructuring savings. Pork input costs are projected to decline but remain above five-year averages, while beef and nut costs persist as headwinds. SG&A savings will support marketing investments and margin expansion, with Q1 earnings pressured by timing of pricing and costs but full-year guidance achievable.