HORMEL FOODS CORP DE

The Company is a global manufacturer and marketer of branded food products. The Company’s three reportable segments, Retail, Foodservice, and International, are described in Note N - Segment Reporting in the Notes to the Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

The Company reported diluted earnings per share of $0.31 for the first quarter of fiscal 2025, down 23 percent compared to the same period last year. Adjusted diluted earnings per share(1) was $0.35. Significant factors impacting the quarter are listed below. All comparisons are to the same period of the prior year unless otherwise noted.

•Net sales for the first quarter were flat compared to the prior year while organic net sales(1) increased. The benefit from higher organic volume(1) and organic net sales(1) in the Foodservice segment was more than offset by lower volume and net sales in the Retail and International segments.

•Total segment profit for the first quarter decreased 13 percent. Segment profit growth in the International segment was more than offset by declines in segment profit for each of the Retail and Foodservice segments.

•Retail segment profit declined in the first quarter as benefits from the Transform and Modernize (T&M) initiative and margin growth from the Emerging Brands and Convenient Meals & Proteins verticals partially mitigated the impact from lower sales and higher raw material costs within the Snacking & Entertaining vertical, higher input costs, and unfavorable whole turkey dynamics.

•Foodservice segment profit decreased in the first quarter, as higher sales were offset by margin pressures, primarily in non-core businesses.

•International segment profit increased in the first quarter, as improved export margins and growth in China were partially offset by softness in Brazil and lower equity in earnings.

•Earnings before income taxes for the first quarter decreased 24 percent, as the impact of higher organic net sales(1) was more than offset by higher cost of products sold and higher selling, general, and administrative (SG&A) expenses compared to the prior period. Adjusted earnings before income taxes(1) decreased 18 percent.

•The pre-tax impact of expenses related to the Company’s T&M initiative, the loss on the sale of a non-core sow operation, and an antitrust litigation settlement in the first quarter of fiscal 2025 was $25.7 million, most of which was recorded in SG&A.

•Year-to-date cash flow from operations was $309 million, a decrease of 23 percent compared to the prior year.