HRL

Defensive

Hormel Foods

Price Chart

Market Data

Financials

XBRL · SEC EDGAR

2008–2025(18yr)

Revenue

Net Income

Free CF

Metric	FY 2008	FY 2009	FY 2010	FY 2011	FY 2012	FY 2013	FY 2014	FY 2015	FY 2016	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021	FY 2022	FY 2023	FY 2024	FY 2025Latest	YoY
Revenue	$6.8B	$6.5B	$7.2B	$7.9B	$8.2B	$8.8B	$9.3B	$9.3B	$9.5B	$9.2B	$9.5B	$9.5B	$9.6B	$11.4B	$12.5B	$12.1B	$11.9B	$12.1B	+1.6%
Gross Profit	$1.1B	$1.1B	$1.2B	$1.3B	$1.3B	$1.4B	$1.6B	$1.8B	$2.2B	$2.0B	$2.0B	$1.9B	$1.8B	$1.9B	$2.2B	$2.0B	$2.0B	$1.9B	-6.4%
Gross Margin	15.7%	16.8%	17.2%	16.9%	16.2%	16.1%	16.8%	19.5%	22.7%	21.9%	20.9%	19.8%	19.0%	16.9%	17.4%	16.5%	17.0%	15.6%	-1.3pp
Operating Income	—	—	—	—	$781.2M	$828.8M	$961.7M	$1.1B	$1.3B	$1.3B	$1.2B	$1.2B	$1.1B	$1.1B	$1.3B	$1.1B	$1.1B	$718.6M	-32.7%
Operating Margin	—	—	—	—	9.5%	9.5%	10.3%	11.5%	13.9%	14.0%	12.6%	12.6%	11.5%	9.9%	10.5%	8.9%	9.0%	5.9%	-3.0pp
Net Income	$285.5M	$342.8M	$395.6M	$474.2M	$500.1M	$526.2M	$602.7M	$686.1M	$890.1M	$846.7M	$1.0B	$978.8M	$908.1M	$908.8M	$1000.0M	$793.6M	$805.0M	$478.2M	-40.6%
Net Margin	4.2%	5.2%	5.5%	6.0%	6.1%	6.0%	6.5%	7.4%	9.3%	9.2%	10.6%	10.3%	9.5%	8.0%	8.0%	6.6%	6.8%	4.0%	-2.8pp
Free Cash Flow	$145.7M	$461.8M	$395.7M	—	—	—	—	$847.9M	$737.3M	$788.9M	$852.1M	$629.2M	$760.5M	$769.5M	$856.1M	$777.6M	$1.0B	$534.3M	-47.1%
FCF Margin	2.2%	7.1%	5.5%	—	—	—	—	9.2%	7.7%	8.6%	8.9%	6.6%	7.9%	6.8%	6.9%	6.4%	8.5%	4.4%	-4.1pp
EPS (Diluted)	$2.08	$2.53	$2.92	$1.74	$1.86	$1.95	$2.23	$2.54	$1.64	$1.57	$1.86	$1.80	$1.66	$1.66	$1.82	$1.45	$1.47	$0.87	-40.8%

Total Debt$2.9B

Cash & Equiv.$670.7M

Net Debt$2.2B

4 min read

1. THE BIG PICTURE

Hormel Foods is attempting to shed its identity as a commodity meat packer to become a "value-added" brand powerhouse, but the transition is proving uneven. While its foodservice and international segments are successfully using price hikes to drive profit, the core retail business is retreating, evidenced by a strategic exit from private-label snacks and a 19.3% drop in segment profit (10-Q). Hormel Foods is essentially a house of 30+ brands currently caught between its legacy manufacturing roots and its high-margin aspirations.

2. WHERE THE RISKS HIT HARDEST

Hormel’s primary strength—its Brand Portfolio of "beloved" names like SPAM and Skippy—is directly threatened by Intangible Asset Impairment risks. Hormel Foods has flagged $683.3 million in assets at "heightened risk" of write-downs, including the Justin’s® trade name and $258.9 million in international goodwill (Risks). If these brands lose consumer traction, the "value-added" strategy management has promised will effectively evaporate into non-cash charges.

Furthermore, Hormel’s Sales and Distribution advantage is compromised by extreme Customer Concentration. Because five customers control 38% of consolidated gross sales—with Walmart alone accounting for 16%—Hormel has limited leverage when facing the "higher raw material input costs" and "logistics expenses" that recently dragged down retail performance (10-K, 10-Q).

3. WHAT THE NUMBERS SAY TOGETHER

The financial data reveals a company that is growing more expensive to run even as it narrows its focus. While net earnings rose 6.6% in the most recent quarter, this was achieved on a slim 1.3% increase in sales, suggesting that profit growth is being squeezed out of pricing actions rather than volume expansion (Recent Results). This 1.3% growth is a slight deceleration from the TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter revenue growth of 1.6%, largely due to the "strategic exit" from non-core private label items (Peer Benchmarking, 10-Q).

Hormel’s efficiency is a concern when compared to its peers. Its Free Cash Flow (FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders) margin of 4.9% ranks 5th out of 6 peers, trailing significantly behind Kraft Heinz (13.4%) and General Mills (9.5%). This suggests that Hormel’s "Transform and Modernize" initiative has yet to translate into the superior cash generation seen at other large-cap food peers. Market skepticism is visible in the supplemental data, with short interest sitting at 6.6% of the float (Supplemental Signals).

4. IS IT WORTH IT AT THIS PRICE?

Hormel trades at 14.8x Forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations, which is a modest 8% premium to the peer median of 13.7x (Peer Benchmarking). At this price, the market is pricing in a long-term growth rate of approximately 0.5% (CAPM analysis).

While a 0.5% growth hurdle seems low for a company currently growing sales at 1.3%, the premium is difficult to defend when looking at margins. Hormel’s 16.0% gross margin is the second-lowest in its peer group, dwarfed by McCormick’s 37.8% and General Mills’ 33.8% (Peer Benchmarking). If growth slows to 0% or if the "winter weather disruptions" and logistics pressures cited by management persist, the justified multiple could fall toward 12.2x (CAPM analysis). Investors are currently paying a "brand premium" for a company with commodity-level margins.

5. WHAT WOULD CHANGE THIS VIEW?

Constructive if the Retail segment profit stabilizes and returns to growth following the exit from low-margin private label snack nuts (Recent Results).
Cautious if Hormel records an impairment charge against the $258.9 million in International goodwill, which would signal that the growth engines in China and Brazil are stalling (Risks).
Cautious if the "Transform and Modernize" initiative fails to improve the FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders margin, which currently sits at the bottom tier of the peer group (Peer Benchmarking).

6. BOTTOM LINE

Structural Advantage: A vertically integrated supply chain in turkey production combined with a portfolio of 30+ iconic brands that provide significant pricing power in the foodservice and export channels.

Bottom Line: Hormel is a stable but relatively inefficient brand manager whose transition to a high-margin "value-added" model is being tested by high customer concentration and looming asset write-downs.

Source: Synthesis · LLM Analysis

4 min read

1. Top 5 Material Risks

Intangible Asset Impairment: Hormel Foods holds $683.3 million in indefinite-lived intangible assets considered at heightened risk of impairment as of October 26, 2025. This includes the International reporting unit ($258.9 million in goodwill) and trade names such as Justin’s®, which are subject to periodic testing that may result in non-cash charges.
Customer Concentration: Sales to Walmart accounted for approximately 16 percent of consolidated gross sales less returns and allowances during fiscal 2025. The top five customers collectively represented approximately 38 percent of consolidated gross sales, making Hormel Foods’s revenue highly sensitive to the loss of any single major retail partner.
Operational Disruptions: Hormel Foods’s success depends on manufacturing and distribution capabilities, particularly at key facilities like the Austin, Minnesota plant. Unplanned events, such as the fire at the Little Rock, Arkansas peanut butter facility in the fourth quarter of fiscal 2025, directly impact production volume and operating results.
Strategic Initiative Execution: Hormel Foods is currently executing a corporate restructuring plan and the "Transform and Modernize" initiative. Failure to realize anticipated cost savings or efficiency improvements from these programs could adversely impact operating profit growth and long-term financial targets.
Commodity Price Volatility: Results are dependent on the cost of pork, poultry, beef, feed grains, and nuts. Because Hormel Foods uses a mix of long-term agreements and spot market purchases, it faces short-term margin pressure if it cannot recover cost increases through pricing adjustments.

2. Company-Specific Risks

Livestock Disease Exposure: Hormel Foods is uniquely exposed to specific animal health risks, including African swine fever (ASF) and Highly Pathogenic Avian Influenza (HPAI). HPAI was detected within Hormel Foods’s turkey supply chain during fiscal 2024 and 2025, directly threatening production volumes.
Investment Impairment: Hormel Foods recognized a $163.7 million impairment charge in fiscal 2025 to reduce the carrying amount of its minority interest in Garudafood to estimated fair value.
Trade Name Write-downs: During fiscal 2025, Hormel Foods recorded specific impairment charges of $59.1 million for the Planters® trade name and $2.9 million for the Chi-Chi's® trade name.
Divestiture Strategy: Hormel Foods actively manages its portfolio through divestitures, such as Hormel Health Labs, LLC in fiscal 2024 and Mountain Prairie, LLC in fiscal 2025, which carry risks related to the inability to divest successfully or the assumption of unknown liabilities.

3. Regulatory/Legal Risks

Production Line Speeds: Pork harvest facilities in the supply chain rely on government-issued waivers to exceed standard production line speeds. If these waivers are not made permanent, harvest capacity could be constrained and costs increased.
Extended Producer Responsibility (EPR) Laws: Multiple U.S. states are implementing EPR laws that require Hormel Foods to enact new compliance policies and pay fees to state governments, increasing administrative and operating expenses.
Environmental Liability: Past and present operations are subject to stringent environmental laws regarding waste disposal. Future discovery of contamination at current or former manufacturing sites could require significant investigation and remediation expenses.

4. Financial Impact Map

Intangible Asset Impairment → Earnings/Net Income → $683.3 million in assets at heightened risk of impairment charges. Customer Concentration → Consolidated Gross Sales → 38 percent of sales tied to top five customers; 16 percent tied to Walmart. Operational Disruptions → Operating Profit → Production volume declines at facilities like Little Rock, Arkansas, directly impact the ability to meet financial results. Strategic Initiative Execution → Operating Profit → Failure to achieve "Transform and Modernize" goals or corporate restructuring benefits threatens operating profit growth. Commodity Price Volatility → Cost of Goods Sold / Gross Margin → Inability to recover input cost increases for pork, poultry, and feed grains through pricing adjustments impacts short-term financial results.

Source: 10-K Item 1A · LLM Analysis

Recent Filings

Form	Filed	Period
8-K	Feb 2026	—
10-Q	Feb 2026	Jan 2026
14A	Dec 2025	—
10-K	Dec 2025	Oct 2025