Stocks in Hormel Foods Corporation (NYSE: HRL) went green in midday trading on Thursday, but the company reduced its full-year guidance with mixed results in the second quarter of 2025. Although sales were slightly higher than in the same period last year, we witnessed a decline in revenue. Brand Foods providers are expecting strong growth later this year, even if they face a dynamic environment.
Revenue errors, revenue inline
In the second quarter of 2025, Homer’s net sales rose slightly year-on-year to $2.9 billion, but missed a slightly missed estimate of $2.91 billion. GAAP earnings per share fell 3% to $0.33. The $0.35 adjusted EPS fell 8% year-on-year, but it was in line with estimates.
Business Performance
Net sales in the retail segment remained in the second quarter as high single digit growth and value-added turkey products in the Mexican portfolio were offset by the effects of promotion timing. Volume has been reduced by 7%, mainly due to reduced product shipments and contract manufacturing. The flagship and rising brands worked well in the quarter and benefited from planter and Jenny O’ turkey.
In the FoodService segment, net sales remained flat in the second quarter, with organic sales rising 4%. The growth of organic sales was extensively based, benefiting from the customized solutions business and the Turkish portfolio. The company saw a big growth in sales and volume of branded products such as Jenny O’, Steamed Hormel over fire Meat, and Cafe h Globally inspired protein.
Volume in the Food Services sector fell by 7%, while organic content fell by 1%. Despite the softness of the industry, volume has grown in several categories, but this growth was offset by a decline in product shipments.
The international segment saw a 7% increase in second quarter sales and a 9% increase in volume. The top line benefited from double-digit volume of exports and sales growth, as well as China’s growth. The Chinese business benefited from the momentum of its retail and foodservice channels and the launch of innovative products.
Filtering guidance
Hormel has narrowed its guidance for 2025. The company currently expects net sales of between $1.20 and $12.2 billion. Organic sales are expected to increase by 2-3%, assuming growth in all segments, increased brand investments and innovation. The GAAP EPS is expected to be $1.49-1.59, while the adjusted EPS is expected to be $1.58-1.68.
