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 $0.33 for the second quarter of fiscal 2025, down 3 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 second quarter were comparable to the prior year. Organic net sales(1) increased 1 percent with growth from the Foodservice and International segments and comparable net sales in the Retail segment.

•Total segment profit for the second quarter decreased 3 percent. Segment profit growth in the Retail segment was more than offset by declines in segment profit for each of the Foodservice and International segments.

•Retail segment profit grew in the second quarter primarily due to benefits from operational efficiencies as part of the Transform and Modernize (T&M) initiative and favorable selling, general, and administrative (SG&A) expenses.

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

•International segment profit declined in the second quarter, as meaningful net sales growth was primarily offset by a shift in export customer mix and softness in Brazil.

•Earnings before income taxes for the second quarter decreased 6 percent, as the benefits from higher net sales and lower SG&A expenses were more than offset by higher cost of products sold and lower interest and investment income compared to the prior period. Adjusted earnings before income taxes(1) decreased 8 percent.

•The pre-tax impact of non-recurring expenses related to the Company’s T&M initiative in the second quarter of fiscal 2025 was $16.6 million, most of which was recorded in SG&A.

•Cash flow from operations was $366 million for the first six months of fiscal 2025, a 43 percent decrease from the comparable period of the prior year. The decline in cash flow from operations was primarily due to an inventory build in the second quarter of fiscal 2025 in advance of the important summer selling season.

Changes in global trade policies, including recently announced tariffs and retaliatory tariffs, did not have a material impact on our results of operations during the second quarter or first six months of fiscal 2025. The Company continues to monitor and evaluate the impact of proposed and enacted tariffs, including proposed and enacted retaliatory tariffs, and other trade restrictions, as well as our ability to mitigate their impacts, which remains uncertain.