HORMEL FOODS CORP /DE/

Net sales and segment profit for each of the Company’s reportable segments are set forth below. The Company does not allocate deferred compensation, non-recurring expenses associated with the T&M initiative, gains or losses on the sale of businesses, investment income, interest expense, or interest income to its segments when measuring performance. The Company also retains various other income and expenses at the corporate level. Equity in earnings of affiliates is included in segment profit; however, earnings attributable to the Company’s corporate venturing investments and noncontrolling interests are excluded. These items are included below as Net Unallocated Expense and Noncontrolling Interest when reconciling to Earnings Before Income Taxes.

The Company is an integrated enterprise, characterized by substantial intersegment cooperation, cost allocations, and sharing of assets. Therefore, the Company does not represent that these segments, if operated independently, would report the profit and other financial information shown below.

Retail

Net sales growth was wide ranging in the Retail segment in the third quarter of fiscal 2025. Meaningful volume and net sales contributions came from the turkey portfolio, Planters® snack nuts, and the SPAM® family of products. Other brands which grew volume and net sales in the quarter include Wholly® guacamole, Hormel® Black Label® bacon, Hormel® chili, and Gatherings® party trays. For the first nine months of fiscal 2025, net sales growth for the Retail segment was led by the turkey portfolio, the SPAM® family of products, and the Mexican foods portfolio.

Retail segment profit declined in the third quarter of fiscal 2025, as robust net sales growth was more than offset by input cost pressures and higher SG&A expenses. For the first nine months of fiscal 2025, segment profit decreased as net sales growth was more than offset by higher input costs.

For the fourth quarter of fiscal 2025, Retail segment profit is anticipated to be comparable to the prior year, as the benefit from net sales growth is expected to be offset by higher input costs.

Foodservice

Organic volume and organic net sales growth were broad-based in the Foodservice segment in the third quarter of fiscal 2025, with significant contributions from the customized solutions business, Planters® snack nuts and the Jennie-O® turkey portfolio. Other branded products, such as Hormel® pepperoni, Hormel® Fire Braised™ meats, and Café H® globally inspired proteins, delivered strong volume and net sales growth.

For the first nine months of fiscal 2025, organic net sales growth in the Foodservice segment was led by the customized solutions business, the Jennie-O® turkey portfolio, and premium prepared proteins. Organic volume increased compared to the prior year period.

Segment profit decreased for the third quarter of fiscal 2025 as meaningful net sales growth was more than offset by the rise in commodity input costs and margin pressures, primarily in non-core businesses. For the first nine months of fiscal 2025, segment profit declined, as net sales growth was more than offset by margin pressures, primarily in non-core businesses.

The Foodservice segment continued to benefit from an extensive range of solutions-based products, its direct-selling organization and a diverse channel presence during the third quarter and first nine months of fiscal 2025.

For the fourth quarter of fiscal 2025, the Company expects Foodservice segment profit to decrease compared to the prior year, as organic net sales growth is expected to be more than offset by margin pressures, primarily in non-core businesses.

International

Strong volume and net sales performance in the International segment was driven by growth across the China market and robust exports of SPAM® luncheon meat in the third quarter and first nine months of fiscal 2025.

International segment profit decreased in the third quarter of fiscal 2025 as meaningful net sales growth was more than offset by competitive pressures in Brazil and lower pork offal margins. For the first nine months of fiscal 2025, segment profit declined, as net sales growth was more than offset by softness in Brazil.

In the fourth quarter of fiscal 2025, the Company expects International segment profit to decrease compared to the prior year, primarily due to higher input costs and continued softness in Brazil.

Unallocated Income and Expense

For the third quarter of fiscal 2025, net unallocated expense decreased, primarily due to the lapping of prior year legal expenses. Net unallocated expense increased for the first nine months of fiscal 2025, primarily due to reduced interest income, the loss on the sale of a non-core sow operation, rabbi trust performance, and higher expenses related to the T&M initiative. These factors were partially offset by the lapping of prior year legal expenses.