Hormel Foods Closes Out a Disappointing Year
Hormel Foods has been warning this has been a difficult year for the usually steady performer. The full fiscal year results, released today, show net earnings at their lowest in at least 13 years, half of what they were last year.
Hormel still closed its fiscal year on Oct. 26 with a profit, $478 million, although last year’s figure was $805 million. Sales crept up 1.6% to $12.106 billion, but the cost of products sold grew by 32% and the company’s tax rate was considerably higher (28% vs. 22.3%).
For the fourth quarter alone, the company recorded a $56 million loss.
Every reporting segment contributed to the disappointing results in some way. Retail, the biggest at nearly $7.5 billion in sales, saw a 1.4% drop in volume and a 24% reduction in operating profit – but was still profitable. Foodservice volume was down 5.5% and its bottom line was down 7%. The scant international segment went from a $92 million profit in FY 2024 to an $80 million loss in FY2025.
“We finished fiscal 2025 with another quarter of solid top-line growth, driven by the continued relevance of our brands and the strength of our value-added portfolio,” “Despite [fourth quarter] momentum, profitability remained challenged due to persistent input cost inflation and discrete items,” said interim CEO chief Jeff Ettinger.
“We have taken decisive actions to improve profitability, including targeted pricing initiatives, reductions in administrative expenses, and continued investment in our Transform and Modernize (T&M) initiative,” he continued. “These efforts are laying a solid foundation for improved earnings performance in fiscal 2026.”
Hormel promises an improved fiscal 2026. For next year, the company expects:
• Net sales in the range of $12.2-12.5 billion; organic net sales growth of 1-4%
• Operating income in the range of $0.96-1.03 billion
• Adjusted operating income in the range of $1.06-1.12 billion, growth of 4-10%
• Diluted earnings per share in the range of $1.29-1.39
• Adjusted diluted earnings per share in the range of $1.43-1.51, growth of 4-10%.
About the Author
Dave Fusaro
Editor in Chief
Dave Fusaro has served as editor in chief of Food Processing magazine since 2003. Dave has 30 years experience in food & beverage industry journalism and has won several national ASBPE writing awards for his Food Processing stories. Dave has been interviewed on CNN, quoted in national newspapers and he authored a 200-page market research report on the milk industry. Formerly an award-winning newspaper reporter who specialized in business writing, he holds a BA in journalism from Marquette University. Prior to joining Food Processing, Dave was Editor-In-Chief of Dairy Foods and was Managing Editor of Prepared Foods.