Hormel Foods Reports 2% Net Sales Increase but 41% Decline in Net Earnings for Fiscal Year 2025

Hormel Foods Corporation reported a net sales increase of 2% for fiscal year 2025, totaling $12.1 billion, compared to $11.9 billion in the previous year. Despite this growth in revenue, the company faced significant challenges, resulting in a 41% decline in net earnings, which fell to $478.2 million from $805 million in fiscal 2024. The decrease in profitability was attributed to persistent input cost inflation, particularly in pork belly, beef, and nut prices, which pressured earnings across all segments. Operating income also decreased by 33%, primarily due to non-cash impairment charges in the International and Retail segments.

The company operates through three reportable segments: Retail, Foodservice, and International. The Retail segment saw net sales rise to $7.5 billion, a 1.1% increase from the prior year, driven by strong performance in the Jennie-O turkey portfolio and the SPAM product line. The Foodservice segment also experienced growth, with net sales reaching $3.9 billion, up 2.5%. However, the International segment reported a slight increase in net sales to $709.1 million, despite facing competitive pressures in Brazil and declines in fresh pork exports. Overall, the company delivered four consecutive quarters of net sales gains, although volume declined across both the Retail and International segments.

Strategically, Hormel Foods continued to implement its multi-year Transform and Modernize initiative, aimed at enhancing operational efficiencies and reducing administrative costs. The company also initiated a corporate restructuring plan, which included a voluntary early retirement program and other workforce adjustments, expected to incur one-time charges between $20 million and $25 million. In fiscal 2025, Hormel recognized $13.3 million in restructuring costs, which were recorded as unallocated corporate expenses.

As of October 26, 2025, Hormel Foods employed approximately 20,000 individuals, with over 90% based in the U.S. The company reported that about 20% of its workforce was covered by collective bargaining agreements, with contracts for approximately 700 employees set to expire in the next fiscal year. The company maintains a strong focus on employee development and retention, with about 50% of its workforce having five or more years of service.

Looking ahead, Hormel Foods anticipates organic net sales growth of 1% to 4% for fiscal 2026, driven by increased brand support, innovation, and market-based pricing actions. The company expects diluted earnings per share to range from $1.29 to $1.39, with segment profit growth anticipated across all three segments. However, risks to this outlook include ongoing inflationary pressures and potential impacts from deteriorating macroeconomic conditions affecting customers and consumers. The company remains committed to returning cash to shareholders, having paid a record $633 million in dividends during fiscal 2025, marking its 60th consecutive year of dividend increases.