Hormel Foods(HRL) - 2025 Q4 - Annual Results

Financial Performance - Hormel Foods reported fiscal 2025 net sales of $12.1 billion, with organic net sales growth of 2%[5]. - The company expects fiscal 2026 net sales in the range of $12.2 billion to $12.5 billion, with organic net sales growth of 1% to 4%[6]. - Operating income for fiscal 2026 is projected to be between $960 million and $1.03 billion, with adjusted operating income growth of 4% to 10%[6]. - Diluted earnings per share for fiscal 2026 are expected to be in the range of $1.29 to $1.39, with adjusted diluted earnings per share growth of 4% to 10%[6]. - Cash flow from operations for fiscal 2025 was $845 million, with dividends paid to shareholders reaching a record $633 million[10]. - The effective tax rate for fiscal 2025 was 28.0%, compared to 22.3% in the prior year[10]. - Total net sales for the fourth quarter ended October 26, 2025, were $3,185.7 million, representing a 2.3% increase compared to $3,138.1 million in the same quarter of the previous year[40]. - For the fiscal year ended October 26, 2025, total net sales reached $12,106.2 million, a 2.5% increase from $11,920.8 million in the prior year[41]. Profitability Challenges - The company faced profitability challenges in fiscal 2025 due to input cost inflation and non-cash impairment charges totaling $234 million[5][10]. - The company reported a net loss of $56,204 in Q4 2025, compared to net earnings of $219,960 in Q4 2024, resulting in a diluted earnings per share of $(0.10) versus $0.40[23]. - The total segment profit for Q4 2025 was $42,190, an 87.4% decline from $334,331 in Q4 2024, with significant losses reported in the International segment[26]. - The effective tax rate for Q4 2025 was (159.9)%, compared to 21.5% in Q4 2024, reflecting significant tax implications from the net loss[23]. - The Company recorded a goodwill and intangible impairment of $70,751 in Q4 2025, indicating potential challenges in asset valuation[23]. Dividend Information - Hormel Foods announced a 1% increase in its quarterly dividend, raising the annualized rate to $1.17 per share, marking 60 years of uninterrupted dividend increases[8]. - The company declared a dividend of $0.2900 per share for Q4 2025, up from $0.2825 in Q4 2024, with total dividends declared for the fiscal year increasing to $1.1600 from $1.1300[23]. Segment Performance - The Retail segment saw net sales growth driven by the turkey portfolio and Applegate products, despite a decline in segment profit due to input cost pressures[11]. - Retail segment net sales for the fourth quarter were $1,922.8 million, up 0.8% from $1,907.1 million year-over-year[40]. - Foodservice segment net sales increased by 6.5% to $1,088.2 million in the fourth quarter, compared to $1,046.0 million in the previous year[40]. - The international segment's net sales decreased by 5.6% in the fourth quarter, totaling $174.7 million compared to $185.0 million in the prior year[40]. Operational Metrics - Capital expenditures for fiscal 2025 were $311 million, with investments in capacity expansions and technology[10]. - Total current assets increased to $3,405,656 in Q4 2025 from $3,246,476 in Q4 2024, while total assets slightly decreased to $13,393,119 from $13,434,729[24]. - Cash and cash equivalents at the end of Q4 2025 were $670,679, a decrease from $741,881 at the end of Q4 2024[25]. - Total volume for the fourth quarter was 1,088,430 lbs., a slight decrease of 0.4% from 1,108,203 lbs. in the same quarter last year[40]. - The retail segment's total volume for the fiscal year was 2,873,655 lbs., down 1.4% from 2,915,141 lbs. in the previous year[41]. Future Initiatives - The Company initiated a multi-year Transform and Modernize (T&M) initiative, excluding non-recurring costs associated with this initiative from its financial measures[28]. - The corporate restructuring plan commenced in Q4 fiscal 2025 aims to reduce administrative expenses and improve efficiencies, with costs primarily related to severance and employee benefits being excluded from core operating performance[32]. - The Company recorded non-cash impairment charges in Q4 fiscal 2025 related to certain intangible assets, which were also excluded from the assessment of core operating performance[33].