HORMEL FOODS REPORTS FIRST QUARTER FISCAL 2025 RESULTS

Core Viewpoint - Hormel Foods Corporation reported solid top-line performance for the first quarter of fiscal 2025, reaffirming its expectations for net sales and adjusted diluted earnings per share for the fiscal year [1][3][4]. Financial Performance - Net sales for the first quarter were $2.99 billion, with organic net sales up 1% compared to the previous year [5][6]. - Operating income was $228 million, with an adjusted operating income of $254 million, resulting in an operating margin of 7.6% and an adjusted operating margin of 8.5% [5][6]. - Diluted earnings per share were $0.31, while adjusted diluted earnings per share were $0.35 [5][6]. - The effective tax rate for the quarter was 21.8%, down from 23.4% in the previous year [19]. Fiscal 2025 Outlook - The company expects net sales for fiscal 2025 to be between $11.9 billion and $12.2 billion [4][6]. - Diluted earnings per share expectations have been updated to a range of $1.49 to $1.63, while adjusted diluted earnings per share remain between $1.58 and $1.72 [6][41]. - The company anticipates year-over-year benefits from the Transform and Modernize initiative in the range of $100 million to $150 million [6]. Segment Highlights Retail - The Retail segment saw a decline in net sales of 1% to $1.89 billion, with a volume decrease of 4% [10][29]. - Key brands such as SPAM®, Applegate®, and Jennie-O® contributed to growth, although snack nuts sales were impacted by production disruptions [10][11]. Foodservice - The Foodservice segment achieved net sales of $930 million, up 1.9%, with strong performance in premium prepared proteins and breakfast sausage categories [13][29]. - Segment profit decreased due to margin pressures, primarily in non-core businesses [13]. International - The International segment experienced strong growth in China, with net sales of $168 million, although this was offset by softness in Brazil [14][29]. - The company focused on expanding its geographical distribution and enhancing its product offerings in the China market [14]. Strategic Initiatives - Hormel Foods is executing its Transform and Modernize initiative, which includes opening a new distribution center in Memphis to enhance inventory flow [11][31]. - The company divested its last owned sow farm operation to reduce commodity exposure and simplify its portfolio [11][32]. Advertising and Community Engagement - Advertising investments for the quarter were $43 million, with expectations for an increase in full-year advertising expenses compared to the prior year [19]. - The company supported community hunger relief initiatives by donating over 30,000 turkeys during the holiday season [11].