Hormel Foods(US:HRL)2025-02-26 22:46Financial Performance - Hormel Foods reported net sales of $2.99 billion for Q1 fiscal 2025, with organic net sales up 1% compared to the previous year[4]. - The company reaffirmed its fiscal 2025 net sales outlook of $11.9 billion to $12.2 billion and adjusted diluted earnings per share expectations of $1.58 to $1.72[5]. - Diluted earnings per share for Q1 were $0.31, with adjusted diluted earnings per share at $0.35, reflecting a decrease from the previous year[4]. - Net sales for the quarter ended January 26, 2025, were $2,988,813, a decrease of 0.3% compared to $2,996,911 for the same quarter in 2024[24]. - Gross profit for the quarter was $475,232, down from $508,733 in the prior year, reflecting a decrease of 6.6%[24]. - Net earnings attributable to Hormel Foods Corporation for the quarter were $170,575, a decline of 22.1% from $218,863 in the same quarter last year[24]. - Adjusted net earnings attributable to Hormel Foods Corporation (Non-GAAP) for the quarter were $190,687, down from $226,763, reflecting a decline of 16.0%[36]. - The diluted earnings per share (GAAP) decreased to $0.31 from $0.40, representing a decline of 22.5% year-over-year[38]. - The company's fiscal 2025 outlook for adjusted operating income is projected to be between $1,175 million and $1,275 million[43]. - Hormel Foods expects diluted earnings per share (Non-GAAP) for fiscal 2025 to range from $1.58 to $1.72[43]. Segment Performance - The company experienced a 4% decline in volume and a 1% decrease in net sales within the Retail segment, with segment profit down 20%[9]. - In the Foodservice segment, organic volume and net sales growth were driven by strong performance in premium prepared proteins, turkey, and breakfast sausage categories[11]. - International segment growth was supported by strong sales in China, with significant contributions from SPAM and Skippy products, despite softness in Brazil[12]. - Segment profit for retail decreased by 20.3% to $119,147, while foodservice profit decreased by 7.6% to $138,826[27]. - The company reported a 1.6% increase in organic net sales for the foodservice segment, despite a 3.7% decline in retail[40]. Tax and Expenses - The effective tax rate for the quarter was 21.8%, down from 23.4% in the prior year, with expectations for the full year between 22.0% and 23.0%[16]. - The effective tax rate for the quarter was 21.8%, compared to 23.4% in the prior year[24]. - Advertising investments for the quarter were $43 million, with expectations for an increase in full-year advertising expenses compared to the prior year[16]. - Hormel Foods' SG&A as a percent of net sales (GAAP) increased to 8.8% from 8.0% year-over-year[38]. Cash Flow and Investments - Cash and cash equivalents increased to $840,398 from $741,881 at the end of the previous quarter[25]. - The company reported a net cash provided by operating activities of $309,206, down from $403,980 in the prior year[26]. - Hormel Foods plans to invest $275 million to $300 million in capital expenditures for fiscal 2025, with $72 million spent in Q1[16]. Strategic Initiatives - Hormel Foods Corporation is undergoing a multi-year Transform and Modernize initiative, which includes non-recurring costs that are excluded from adjusted performance measures[29]. - The company expects year-over-year benefits from its Transform and Modernize initiative in the range of $100 million to $150 million[5]. - The Transform and Modernize initiative is expected to incur estimated charges of $46 million to $52 million in fiscal 2025[43].