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HORMEL FOODS CORP /DE/ (HRL)·Q4 2025 Earnings Summary

Executive Summary

  • Q4 FY2025 update flagged strong top-line performance “toward the top end” of prior net sales guidance, but adjusted EPS was guided approximately $0.08–$0.09 below prior expectations due to commodity inflation, poultry disease impacts (HPAI, pneumoviruses), a recall, and a late-quarter plant disruption .
  • Prior Q4 guidance from the Q3 release: net sales $3.15–$3.25B; diluted EPS $0.36–$0.38; adjusted EPS $0.38–$0.40 .
  • Preliminary update signaled expected non-cash impairments, primarily in International and snack nuts; GAAP EPS not reaffirmed pending close .
  • Upcoming catalyst: final Q4/FY results and outlook on Dec 4, 2025 earnings call (8:00 a.m. CT), with transcript not yet available .

What Went Well and What Went Wrong

What Went Well

  • Strong demand across retail, foodservice, and international; “top-line momentum” continued in Q4 with turkey portfolio and PLANTERS contributing .
  • Management reaffirmed confidence: “We remain confident in the relevance of our portfolio and our brands… well-positioned to navigate these temporary challenges” — Jeff Ettinger (interim CEO) .
  • Q3 preceding Q4 showed broad top-line health: net sales $3.03B (+4.6% YoY), organic net sales +6%, with notable brand progress (Jennie-O lean ground turkey, SPAM, Planters, Wholly guacamole) and direct selling strength in foodservice .

What Went Wrong

  • Persistent commodity input inflation above expectations pressured Q4 profitability .
  • Poultry industry disease (HPAI and pneumoviruses) affected operations in Q4 .
  • Late-quarter operational disruptions: voluntary Class 1 recall of ~4.875M lbs of Fire Braised items for extraneous metal; fire at Little Rock peanut butter facility — both weighed on near-term earnings .
  • Management anticipates non-cash impairment charges primarily in International and snack nuts and guided Q4 adjusted EPS $0.08–$0.09 below prior expectations .

Financial Results

Note: Final Q4 FY2025 results will be released Dec 4, 2025; below includes guidance, preliminary update, and consensus.

Consolidated – Guidance vs Preliminary Update vs Consensus (Q4 FY2025)

MetricQ4 Guidance from Q3 (older)Preliminary Update (newer)Consensus (S&P Global)
Net Sales ($USD Billions)$3.15–$3.25 Toward top end of range $3.238*
Diluted EPS ($USD)$0.36–$0.38 Not reaffirmed (GAAP) pending close $0.322*
Adjusted EPS ($USD)$0.38–$0.40 Approximately $0.08–$0.09 below prior expectations N/A

Values marked with an asterisk were retrieved from S&P Global.

Trailing Quarters – Consolidated Actuals (for trend context)

MetricQ2 FY2025 (older)Q3 FY2025 (newer)
Net Sales ($USD Billions)$2.899 $3.033
YoY Net Sales Growth (%)+0.4% +4.6%
Diluted EPS ($USD)$0.33 $0.33
Adjusted Diluted EPS ($USD)$0.35 $0.35
Operating Margin (%)8.6% 7.9%
Adjusted Operating Margin (%)9.1% 8.4%

Segment Breakdown – Net Sales and Segment Profit

SegmentNet Sales Q2 FY2025 ($MM)Segment Profit Q2 FY2025 ($MM)Net Sales Q3 FY2025 ($MM)Segment Profit Q3 FY2025 ($MM)
Retail$1,783.8 $137.1 $1,858.4 $122.6
Foodservice$936.4 $140.6 $987.0 $140.7
International$178.5 $18.4 $187.5 $18.9
Total$2,898.8 $296.2 $3,032.9 $282.2

KPIs and Operating Details

KPIQ2 FY2025Q3 FY2025
Advertising Investments ($MM)$36 $41
Effective Tax Rate (%)22.0% 22.3%
Capital Expenditures ($MM)$75 $72
Depreciation & Amortization ($MM)$64 $65
Cash Flow from Operations ($MM)$56 $157
Dividends Returned ($MM)~$159 ~$159

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Net SalesQ4 FY2025$3.15–$3.25B “Toward top end” of prior range Maintained; leaning higher
Diluted EPS (GAAP)Q4 FY2025$0.36–$0.38 Not reaffirmed pending close; impairments expected Suspended pending close
Adjusted EPSQ4 FY2025$0.38–$0.40 ~$0.08–$0.09 below prior expectations Lowered
Fiscal EPS (GAAP)FY2025$1.49–$1.59 (Q2) $1.33–$1.35 (Q3 revised) Lowered
Fiscal Adjusted EPSFY2025$1.58–$1.68 (Q2) $1.43–$1.45 (Q3 revised) Lowered
Fiscal Operating Income (GAAP)FY2025$1,118–$1,212MM (Q2) $982–$996MM (Q3 revised) Lowered
Fiscal Adjusted Operating IncomeFY2025$1,175–$1,275MM (Q2) $1,054–$1,070MM (Q3 revised) Lowered
Restructuring ChargesQ4 FY2025 & Q1 FY2026N/A$20–$25MM expected New expense outlook
DividendsFY2025N/ANo change referenced; ~$159MM returned per Q2/Q3 Maintained activity

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 FY2025)Previous Mentions (Q3 FY2025)Current Period (Q4 FY2025 Update)Trend
Commodity inflationMargin pressures, non-core businesses; adj. operating margin 9.1% Inflation drove earnings shortfall despite organic growth; adj. operating margin 8.4% “Persistent inflation” in key inputs, above expectations Worsening
Poultry (Jennie-O)Retail lean ground turkey strength Continued demand and leadership Impact from HPAI and pneumoviruses Worsening near term
Planters/snackingSequential distribution and sales improvement Notable progress; YOY dollar sales growth Q4: contributor to top-line momentum; snack nuts subject to potential impairment Mixed
International (China/exports)Strong China and export growth; segment profit down on mix/Brazil Strong volume/sales; profit down on Brazil competition, lower offal margins Anticipated non-cash impairment primarily in International Deteriorating profitability
Transform & Modernize (T&M)Benefits reaffirmed; projects advancing ~90 projects contributing measurable value Continued focus on productivity to mitigate headwinds Ongoing positive
Supply chain/operationsNetwork optimization; opened Memphis DC Facility partial closure, reallocation; packaging/brand refresh Recall of Fire Braised items; Little Rock facility fire Negative events offset productivity

Management Commentary

  • “We remain confident in the relevance of our portfolio and our brands… well-positioned to navigate these temporary challenges and are committed to delivering long-term, sustainable growth” — Jeff Ettinger, interim CEO .
  • “Our entire team is aligned on a clear mission: build on our top-line momentum, urgently return bottom-line growth, and deliver long-term, sustainable value” — Jeff Ettinger (Q3 release) .
  • Q4 outlook: strong demand expected across retail, foodservice, international; pricing actions and productivity initiatives to address inflation .

Q&A Highlights

  • Not available: The company will release Q4/FY results and host its earnings call on Dec 4, 2025; transcript is not yet available as of this report date .

Estimates Context

  • Q4 FY2025 consensus: EPS $0.322*, revenue $3.238B*, based on 8 EPS estimates and 6 revenue estimates.*
  • Company’s prior guidance implied diluted EPS of $0.36–$0.38 and adjusted EPS of $0.38–$0.40; preliminary update indicated adjusted EPS approximately $0.08–$0.09 below prior expectations and GAAP EPS not reaffirmed pending close with impairments expected .
  • Implication: Street EPS likely needs to account for impairment and operational headwinds; revenue near the high end of guidance suggests estimate resilience on the top line, while EPS estimates may drift lower given the update .

Values marked with an asterisk were retrieved from S&P Global.

Key Takeaways for Investors

  • Expect a top-line beat relative to mid-range guidance, but bottom-line weakness: adjusted EPS guided ~$0.08–$0.09 below prior targets due to inflation, poultry disease, recall, and plant disruption .
  • Watch for non-cash impairments (International, snack nuts) and any GAAP EPS reconciliation in the Dec 4 release; these items can materially affect GAAP comparisons and narrative .
  • Operational integrity actions (recall, facility repairs) and restructuring ($20–$25MM) may weigh near-term, but T&M projects continue to deliver savings and capability upgrades .
  • Segment mix matters: Retail and Foodservice showed healthy net sales growth in Q3, but margin pressure persists; monitor pricing actions and cost outlook into FY2026 .
  • Narrative catalyst is the Dec 4 call: clarity on magnitude of impairments, Q4 actuals vs consensus, FY2026 guidance, and pricing/productivity offsets will drive stock reaction .
  • Medium term: focus on portfolio relevance (turkey, PLANTERS, SPAM), China initiatives, and supply chain modernization; assess whether margin recovery can catch up to sustained top-line momentum .
  • Risk monitoring: commodity inflation trajectory, poultry health impacts, and Brazil competitive environment; these are key variables for margin normalization .