HORMEL FOODS REPORTS FOURTH QUARTER AND FULL-YEAR FISCAL 2025 RESULTS

Core Insights - Hormel Foods Corporation reported solid top-line growth for fiscal 2025, driven by brand relevance and a strong value-added portfolio, but faced profitability challenges due to input cost inflation and discrete items [4][6] - The company is focused on reshaping its earnings trajectory in fiscal 2026 with strategic initiatives aimed at consumer needs and operational excellence [4][5] Fiscal 2025 Results - Net sales reached $12.1 billion, with organic net sales up 2% [7] - Operating income was $719 million, with an adjusted operating income of $1,019 million [7] - The effective tax rate was 28.0%, and diluted earnings per share were $0.87, with adjusted diluted earnings per share at $1.37 [7][13] Fiscal 2026 Outlook - The company expects net sales between $12.2 billion and $12.5 billion, with organic net sales growth of 1% to 4% [6][8] - Adjusted operating income is projected to be between $1.06 billion and $1.12 billion, reflecting a growth of 4% to 10% [8] - Adjusted diluted earnings per share are anticipated to be in the range of $1.43 to $1.51, also indicating growth of 4% to 10% [8] Dividend Growth - Hormel Foods announced a 1% increase in its quarterly dividend, marking 60 years of uninterrupted dividend increases [9] Segment Highlights - Retail segment net sales growth was driven by turkey products, Planters snack nuts, and Applegate products, despite a decline in segment profit due to non-cash impairment charges [12][14] - Foodservice segment saw organic net sales growth from customized solutions and branded offerings, but faced profit declines due to a chicken-product recall and rising input costs [15] - International segment growth was led by SPAM and refrigerated products, although it faced challenges from fresh pork exports and competitive pressures in Brazil [16] Financial Position - Cash flow from operations was $845 million, with total long-term debt at $2.9 billion [7][13] - The company maintained a strong financial position with cash on hand of $671 million and inventories of $1.7 billion at fiscal year-end [13][27]