HRL · Q4 2025 Earnings

Cautious

Hormel Foods

Reported December 4, 2025

30-second summary

Hormel delivered Q4 FY2025 revenue of $3.2B (in-line with the $3.15–$3.25B guide) but adjusted EPS of $0.32 landed 6–8 cents below the $0.38–$0.40 forward guide management committed to just one quarter ago — a material miss on a narrowed range. The new FY2026 adjusted EPS guide of $1.43–$1.51 represents 4–10% growth off FY2025's $1.37 actual, with management explicitly flagging "continued earnings pressure in the first quarter" and a Q1 FY2026 print 2–4 cents below prior year. The new FY2026 high-end of $1.51 sits below FY2024's actual adjusted EPS of $1.58, confirming the credibility reset is now structural, not transitional.

Headline numbers

EPS

Q4 FY2025

$0.32

Revenue

Q4 FY2025

$3.20B

+1.5% YoY

Gross margin

Q4 FY2025

14.0%

Free cash flow

Q4 FY2025

$0.23B

Operating margin

Q4 FY2025

0.1%

Key financials

Q4 FY2025

Metric	Q4 FY2025	YoY	Q3 FY2025	QoQ
Revenue	$3.20B	+1.5%	$3.03B	+5.6%
EPS	$0.32	—	$0.35	-8.6%
Gross margin	14.0%	—	16.1%	-210bps
Operating margin	0.1%	—	7.9%	-780bps
Free cash flow	$0.23B	—	$0.09B	+172.9%

Guidance

Company met Q4 revenue guidance but missed EPS expectations; issued FY2026 guidance with modest 1-4% organic growth and 4-10% adjusted EPS growth, signaling continued near-term pressure tempered by sequential improvement through the year.

Guidance is issued for both next quarter and the full year. Both may appear below.

Actuals vs prior guidance

Metric	Period	Prior guide	Actual	Δ	Result
Revenue	Q4 FY2025	$3.15 - $3.25 billion	$3.2 billion	in-line	Met
Adjusted Diluted Earnings Per Share	Q4 FY2025	$0.38 - $0.40	$0.32	-$0.06 to -$0.08 below guide	Met
Organic Net Sales Growth	Q4 FY2025	1% - 4%	2%	in-line with low-to-mid range	Missed

New guidance

Metric	Period	Guide	YoY
Adjusted Diluted Earnings Per Share	FY2026	$1.43 - $1.51	—
Revenue	FY2026	$12.2 - $12.5 billion	+0.8% to +3.3% YoY
Organic Net Sales Growth	FY2026	1% - 4%	—
Adjusted Operating Income	FY2026	$1.06 - $1.12 billion	—
Operating Income (GAAP)	FY2026	$0.96 - $1.03 billion	—
Diluted Earnings Per Share (GAAP)	FY2026	$1.29 - $1.39	—
Effective Tax Rate	FY2026	21.5% - 22.5%	—
Capital Expenditures	FY2026	$260 - $290 million	—

Segment performance

Q4 FY2025

Segment	Q4 FY2025	YoY
Retail	$1.92B	+0.8%
Foodservice	$1.09B	+4.0%
International	$0.17B	-5.6%
Foodservice Organic Net Sales Growth	6%	—

Platform metrics

Q4 FY2025

Segment	Q4 FY2025
Organic Net Sales Growth	2%
Retail Volume	746.6 million lbs

Profitability

Q4 FY2025

Segment	Q4 FY2025
Adjusted Operating Margin	7.7%
Retail Adjusted Segment Profit	$117.1 million
Foodservice Segment Profit	$134.4 million
Cash Flow from Operations	$323 million

Other KPIs

Q4 FY2025

Segment	Q4 FY2025
Dividend Per Share	$0.29

Management tone

The candor stepped up notably this quarter, which is itself a tone signal. Q4 FY2025 went further than past quarters: "Candidly, we fell significantly short of our earnings goal." Pairing direct accountability with a FY2026 high-end below FY2024 actual EPS suggests management has chosen to take the credibility hit upfront rather than walk down a range a fourth time. The "conviction to win" rhetoric that followed reads as the obligatory pivot, not a confidence signal.

T&M moved from quantified offset to invisible operating expense. This quarter: "we do not plan to report T&M savings separately going forward." The stated reason is consolidation into broader operations, but the practical effect is the removal of the line investors used to track transformation ROI. Q&A confirmed FY2026 is the final year of the current program — a meaningful disclosure not previously telegraphed.

Commodity framing shifted to "structurally elevated." Q4 FY2025: pork costs will "decline compared to fiscal 2025, but still remain above the five-year average," and beef "remains high and is expected to be a headwind throughout fiscal 26." Pricing lags persist, costs stay elevated, T&M disappears into the run-rate.

Turkey supply: "we anticipate continued turkey supply constraints through the first half of 2026." HPAI cases returned in Q4 FY2025, especially across the Midwest. The asymmetric structural setup that was supposed to underwrite back-half margin recovery has rolled forward with no quantified benefit.

The Q1 FY2026 warning is the most concrete forward signal. Management explicitly said Q1 FY2026 earnings will decline 2–4 cents YoY due to pricing-cost timing, lingering Q4 FY2025 issues, and SG&A. With FY2026 adj. EPS guided to $1.43–$1.51 (midpoint $1.47, +7.3% YoY), a Q1 print below prior year implies the remaining three quarters must deliver disproportionate growth to hit the midpoint.

Recurring themes management leaned on this quarter:

Protein-centric portfolio leadership and consumer-obsession strategyMargin pressure from commodity inflation (pork, beef) and avian illness supply disruptionsPricing actions lagging cost inflation with timing mismatchesPortfolio simplification and strategic exits (Justins, private label, soup stock)AI and data modernization as operational efficiency enablerBrand extension beyond traditional categories (Spam musubi, Applegate chicken)

Risks management surfaced:

Continued avian influenza impacts on turkey supply through H1 2026Beef costs remaining elevated as persistent headwind throughout fiscal 2026Timing lag between pricing actions and cost inflation reducing profit realizationDiscretionary items: chicken product recall and Little Rock facility fire (~3 cents EPS impact in Q4)Dynamic consumer environment and broader food industry headwinds requiring wider guidance ranges

Q&A highlights

Michael Levery · Piper Sandler

Request to unpack FY2026 guidance with key puts and takes, specifically on organic net sales growth (1-4%) and adjusted operating income growth (4-10%), and follow-up on portfolio reshaping strategy and whether announced actions represent a starting point.

Jeff Ettinger detailed top-line drivers including pricing flow-through, enhanced marketing support, and mix improvement. Operating income growth supported by pricing, mix, TNM benefits, restructuring savings, and pork cost relief in H2. John Shoen characterized portfolio reshaping as ongoing strategic effort focused on simplifying operations, exiting non-strategic businesses, and positioning for sustainable growth; cited Justin's divestiture as example of deliberate strategy.

Organic net sales growth guidance: 1-4%Adjusted operating income growth guidance: 4-10% (7% midpoint)Pricing actions already taken, some rolling into Q1/early Q2Expect continued TNM benefits

Ben Thurer · Barclays

Questions on Planters recovery trajectory (distribution, shelf space, profitability recovery cadence) and whether Brazil venture is under review for potential divestiture given portfolio optimization efforts.

John Shoen reported Planters fully in growth mode with consumption up 12% in dollar and 6% in volume over latest 13 weeks; distribution recovery nearly complete and up 13% YoY. Profit recovery hampered by cashew mix shifts, but expected to improve as consumers lap cashew pricing in Q2 2026. Regarding Brazil, acknowledged it has been a drag on international performance; stated everything is under review in portfolio process and company will continue evaluating what makes sense through 2026.

Planters consumption: +12% dollar, +6% volume (latest 13 weeks)Planters distribution: +13% YoY, nearly complete recoveryPlanters base sales: +10%Cashew pricing lapping begins Q2 2026

Heather Jones · Heather Jones Research

Two-part question: (1) Assumptions on pork raw material costs given improving industry disease recovery and expected supply growth, requesting quantification beyond five-year average vs. FY25 guidance; (2) How consumer environment assumptions factor into FY2026 outlook and food service traffic expectations.

Paul Dahl indicated pork remains headwind YoY in Q1 but some YoY relief beginning in bellies; pricing actions announced; beef and nut headwinds expected for full FY26; company refining commodity forecasting processes for greater real-time agility. Jeff Ettinger noted Q1 earnings pressured 2-4 cents below prior year due to pricing implementation lag, elevated commodity costs, turkey supply issues, and SG&A timing. John Shoen characterized consumer as still strained, factoring value-seeking behavior throughout FY26; food service expected flat to slight growth; company confident in portfolio positioning and channel resilience despite challenging macro environment.

Q1 earnings expected 2-4 cents below prior yearPork still headwind YoY in Q1Pricing actions announced for food service with no changes notedBeef and nut headwinds modeled for full FY26

Paran Sharma · Stevens

Two-part: (1) Quantification of TNM investment and reinvestment in business (noting prior $75M FY24 and $100-150M FY25 targets); (2) Cadence of FY26 earnings recovery across Q2-Q4 (gradual sequential vs. step-up in back half).

Paul Dahl explained TNM is final year of current program; company not breaking out financial benefits separately given perceived confusion but expects benefits in FY26 spread across marketing enhancement, offsetting inflationary pressure, and margin expansion. John Shoen detailed reinvestment concentrated on focus brands (Planters, Spam, Genio) and critical innovation; company tracks ROI analytically on marketing investments and emphasizes importance of brand support through pricing to enable successful price implementation. Jeff Ettinger noted Q1 challenges pull down full-year but confirmed acceleration of benefit in remaining quarters; Q4 particularly beneficial given three cents of one-time incidents in prior year.

TNM is final year of current programTNM financial benefits to be spread across marketing enhancement, inflationary offset, and margin expansionMarketing reinvestment concentrated on Planters, Spam, Genio and critical innovationQ1 earnings pressured, acceleration expected in Q2-Q4

Max Gomport · DNP Parima

Two-part: (1) Tariff update specifically on cashew tariffs in light of recent exemption announcements and quantification of any FY25 cash-ew tariff impact that may not repeat in FY26; (2) Reconciliation of discrete profit growth items (admin savings, chicken recall/Little Rock facility lapping, T&M benefits, turkey pricing) against 4-10% guidance, questioning what headwinds are offsetting these tailwinds.

Paul Dahl indicated tariff range for FY26 of $25-35M primarily on supplies, steel, aluminum; noted company was monitoring cashews until recent reciprocal tariff removal announcement but has not quantified specific FY25 cashew tariff impact or FY26 benefit. Jeff Ettinger addressed profit growth reconciliation by highlighting Q1 creates a hole (implying rest-of-year much higher than 7%), and noted pricing math is complex—company sometimes chooses not to pass through full cost increases to protect long-term brand health, factored into FY26 outlook.

FY26 tariff estimate: $25-35M (supplies, steel, aluminum)Cashew tariff exemption announced; specific impact not quantifiedQ1 earnings pressured creates hole in annual guidancePricing not always passed through fully to protect brand health

Answers to last quarter's watch list

Q4 FY2025 adj. EPS within $0.38–$0.40 and revenue within $3.15–$3.25B. Revenue landed at $3.2B (in-range). Adj. EPS missed at $0.32, 6–8 cents below the low end. GAAP EPS came in at -$0.10. Management cited ~3 cents from chicken recall and Little Rock fire; even adjusted for those, the underlying print would have missed. Status: Resolved negatively

The "holistic 2026" framework — quantitative range or pivot to algorithm-only. Management did provide a quantified FY2026 range ($1.43–$1.51 adj. EPS, $12.2–$12.5B revenue), so the formal pivot to algorithm-only was avoided. The quantification is more transparent than feared but the underlying message — structural reset — is the bear case. Status: Resolved negatively

Q1 FY2026 commodity environment vs. "pressures persist into next year." Management explicitly guided Q1 FY2026 adj. EPS down 2–4 cents YoY, citing pricing-cost timing, elevated commodities, turkey supply issues, and SG&A. Pork to decline vs. FY2025 but stay above five-year average; beef elevated throughout FY2026. Status: Resolved negatively

T&M dollar disclosure for FY2026. Management eliminated separate T&M reporting entirely. Q&A confirmed FY2026 is the final year of the current program. The disclosure was downgraded, not maintained. Status: Resolved negatively

Foodservice organic volume — acceleration or stagnation. Foodservice organic net sales grew +6% in Q4 FY2025; reported revenue +4%. Segment profit reached $134.4M — the cleanest segment print in the portfolio. Management modeled "flat to little growth" for the industry in FY2026, capping the runway. Status: Continue monitoring

Planters profit growth rate vs. revenue growth rate. Management explicitly acknowledged the gap persists, citing cashew mix. Consumption is +12% dollar / +6% volume; profit recovery expected to improve as consumers lap cashew pricing in Q2 FY2026. The gap is narrowing on a timeline, not yet closed. Status: Continue monitoring

What to watch into next quarter

Q1 FY2026 adj. EPS landing within 2–4 cents below prior-year. A Q1 print below that range puts the FY2026 $1.43–$1.51 range immediately at risk given the back-half-loaded cadence.

Whether FY2026 organic net sales growth tracks closer to the +4% high end or the +1% low end in the early quarters. The Q4 FY2025 print of +2% was at the low end of the same range, and there's no obvious catalyst for acceleration without Foodservice industry traffic recovery, which management explicitly is not modeling.

Brazil disposition decision. International revenue declined 5.6% in Q4 FY2025 and management said "everything is under review." A formal divestiture announcement would simplify the segment and likely be received as a positive portfolio action.

Planters profit margin convergence with revenue growth in Q2 FY2026 as cashew pricing laps. Management committed to this timeline explicitly; failure to deliver Q2 FY2026 profit acceleration would invalidate the remaining bull case on the Planters recovery.

Whether tariff exposure ($25–35M baseline) expands as policy evolves, particularly outside the cashew exemption. Above $35M moves from a managed item to a guide risk.

FY2026 capex run-rate of $260–$290M, down from FY2025 actual of $311M. A reduced capital intensity signal is consistent with portfolio simplification but worth tracking against any later upward revision.

Realization of corporate restructuring savings. The 2–3x payback on the $20–25M implementation cost is concentrated in Q2–Q4 FY2026; tracking how much flows to the SG&A line vs. is reinvested will calibrate the back-half ramp.

Sources

Hormel Foods Q4 FY2025 Earnings Release (SEC filing): https://www.sec.gov/Archives/edgar/data/48465/000004846525000056/hrlearningsrelease2025q4.htm
Hormel Foods Q3 FY2025 Earnings Release (prior period reference): https://www.sec.gov/Archives/edgar/data/48465/000004846525000042/hormelearningsreleaseq32025.htm

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