Hormel Foods plans to regain momentum in 2025 after a challenging year
USA – Hormel Foods Corp. will focus on its value-added and premium brands to drive a recovery in 2025 after underwhelming performance last year, according to CEO James Snee.
The company recorded a 1% increase in organic net sales for the first quarter, which Snee described as a positive sign despite shifting consumer spending.
Retail efforts have prioritized core and emerging brands, with Spam, Applegate natural and organic meats, Hormel Black Label bacon, and Jennie-O lean ground turkey leading sales growth.
For the quarter ending January 26, 2025, net earnings fell to US$171 million, or 31 cents per share, compared to US$219 million, or 40 cents per share, in the previous quarter.
Revenue declined slightly to US$2.98 billion from US$2.99 billion a year earlier.
Retail sales volume dropped 3.7% to US$737 million, down from US$765 million in the previous quarter, while net retail sales slipped 1.1% to US$1.89 billion.
Foodservice, however, grew 1.9% to US$930 million, with premium prepared proteins in foodservice achieving double-digit growth for the fifth consecutive quarter.
Snee said the company is confident in its ability to sustain momentum in the coming months.
He highlighted upcoming product innovations aimed at enhancing convenience and flavor, alongside continued advertising investments in key brands to drive revenue.
Turkey challenges and shifting strategies
Hormel continues to move through difficulties in its whole-bird turkey segment, which has placed pressure on its overall performance.
The company has introduced pricing adjustments that are expected to provide financial benefits in the latter half of the year.
Executive Vice President and CFO Jacinth Smiley cited weaker year-over-year turkey market performance, supply chain disruptions caused by bird diseases, and higher-than-expected commodity costs as key challenges.
Despite volatility in the turkey market, Hormel sees an opportunity for value-added turkey products as GLP-1 weight-loss drugs gain popularity.
Planters and 2025 outlook
The Planters brand is recovering after a nut-processing plant shutdown last May disrupted production and sales.
The first quarter showed improvements, supported by better inventory levels, distribution expansion, and new product development.
A marketing push during the Super Bowl, featuring multiple Hormel brands in a single campaign, played a role in the brand’s rebound.
Snee said the company has shifted from individual brand promotions to a broader multi-brand media strategy, leveraging partnerships like one with ESPN.
Looking ahead, Hormel projects organic net sales growth of 1% to 3% for the year and earnings per share between US$1.49 and US$1.63, slightly lower than its previous forecast.
The company also expects its transformation and modernization initiative to contribute between US$100 million and US$150 million in benefits.
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