NYSE:HRL
HORMEL FOODS CORP /DE/
Hormel Foods is a diversified food manufacturing powerhouse delivering stable cash flows across premium deli meats, convenience meals, and pet nutrition sectors.
Key Metrics
Investment Thesis
Bull Case
Hormel offers a defensive investment profile with consistent cash generation of $845.3M and a diversified product mix that provides resilience against inflationary pressures in the essential food category.
Bear Case
The substantial decline in net profit coupled with high capital expenditures of $310.9M suggests that growth may be stalling, while the large accumulated other comprehensive loss could signal underlying asset valuation concerns.
About HORMEL FOODS CORP /DE/
Hormel Foods Corp is a leading global food manufacturer specializing in ready-to-eat meals, deli meats, and consumer packaged goods. Operating primarily in the United States with international presence, the company serves retailers, foodservice distributors, and consumers through brands like SPAM, Jennie-O, and Oscar Mayer.
Analysis
Management Discussion
While revenue remained relatively flat at $12.11B in the latest period compared to prior years, net income contracted significantly from $804.6M to $477.8M, indicating potential margin compression or one-time charges affecting profitability.
Industry Overview
The global processed food industry is characterized by intense competition and shifting consumer preferences towards healthier options, yet it remains a resilient sector driven by demand for convenience and value.
Financial Statements
Income Statement
Balance Sheet
Cash Flow
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Revenue | $12.11B | $11.92B | $12.11B |
| Cost of Revenue | $10.11B | $9.90B | $10.21B |
| Gross Profit | $2.00B | $2.02B | $1.89B |
| Operating Expenses | $927.8M | $954.2M | $1.17B |
| Operating Income | $1.07B | $1.07B | $718.6M |
| R&D | $33.7M | $36.1M | $35.2M |
| G&A | $942.2M | $1.01B | $996.6M |
| Stock-Based Comp | $24.1M | $23.2M | $25.6M |
| D&A | $253.3M | $257.8M | $263.9M |
| Depreciation | $227.3M | $233.8M | $241.2M |
| Amortization | $18.4M | $16.4M | $14.9M |
| Other OpEx | $-48.1M | $-87.2M | $141.4M |
| Non-Operating Income | $-58.6M | $-32.5M | $-55.2M |
| Interest Expense | $73.4M | — | — |
| Pre-Tax Income | $1.01B | $1.04B | $663.4M |
| Income Tax | $220.6M | $230.8M | $185.7M |
| Continuing Ops | $792.9M | $804.6M | $477.8M |
| Discontinued Ops | $0 | $0 | $-1.0K |
| Net Income | $792.9M | $804.6M | $477.8M |
| Minority Interest | $-653.0K | $-407.0K | $-433.0K |
| Net to Common | $793.6M | $805.0M | $478.2M |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Current Assets | $3.30B | $3.25B | $3.41B |
| Cash & Equivalents | $736.5M | $741.9M | $670.7M |
| Marketable Securities | $16.7M | $24.7M | $32.9M |
| Accounts Receivable | $817.4M | $817.9M | $784.8M |
| Inventory | $1.68B | $1.58B | $1.75B |
| Prepaid Expenses | $39.0M | $35.3M | $73.2M |
| Other Current Assets | $7.2M | $50.4M | $96.8M |
| Long-Term Assets | $10.15B | $10.19B | $9.99B |
| Intangibles | $1.76B | $1.73B | $1.65B |
| Goodwill | $4.93B | $4.92B | $4.92B |
| Operating Leases | $131.9M | $147.7M | $163.4M |
| Other LT Assets | $3.33B | $3.38B | $3.25B |
| Total Assets | $13.45B | $13.43B | $13.39B |
| Current Liabilities | $2.31B | $1.40B | $1.38B |
| Accounts Payable | $771.4M | $735.6M | $731.6M |
| Current Debt | $950.5M | $7.8M | $6.6M |
| Current Leases | $26.2M | $32.1M | $34.7M |
| Other Current Liab | $511.9M | $557.4M | $552.1M |
| Long-Term Liabilities | $3.40B | $4.03B | $4.10B |
| Long-Term Debt | $2.36B | $2.85B | $2.85B |
| LT Operating Leases | $109.2M | $121.3M | $133.3M |
| Other LT Liab | $930.1M | $1.06B | $1.11B |
| Total Liabilities | $5.71B | $5.43B | $5.48B |
| Shareholders' Equity | $7.74B | $8.00B | $7.92B |
| Paid-In Capital | $506.2M | $571.2M | $620.1M |
| Retained Earnings | $7.49B | $7.68B | $7.52B |
| AOCI | $-272.3M | $-263.3M | $-243.6M |
| Total L&E | $13.45B | $13.43B | $13.39B |
| Metric | 2023 | 2024 | 2025 |
|---|---|---|---|
| Net Income (CFO) | $792.9M | $804.6M | $477.8M |
| Non-Cash Adjustments | $411.8M | $614.6M | $294.5M |
| Working Capital Changes | $-156.8M | $-152.5M | $73.0M |
| Cash from Operations | $1.05B | $1.27B | $845.3M |
| Capital Expenditures | $270.2M | $256.4M | $310.9M |
| Cash from Investing | $-689.5M | $-236.9M | $-298.6M |
| Debt Issuances | $2.0M | $497.8M | $0 |
| Share Buybacks | $12.3M | $0 | $0 |
| Dividends Paid | $592.9M | $615.0M | $633.2M |
| Cash from Financing | $-600.1M | $-1.03B | $-614.0M |
| FX Effect | $-3.8M | $5.6M | $-3.9M |
| Net Change in Cash | $-245.6M | $5.3M | $-71.2M |
| Beginning Cash | $982.1M | $736.5M | $741.9M |
| Ending Cash | $736.5M | $741.9M | $670.7M |
Frequently Asked Questions
How does HORMEL FOODS CORP /DE/ make money?
The company derives revenue from three core pillars: processed meats including its iconic SPAM and lunchmeat brands; refrigerated and frozen foods such as Jennie-O turkey and Oscar Mayer hot dogs; and consumer packaged goods like Chef Boyardee pasta sauces and canned soups.
What are the main risks for HRL?
Investors should monitor exposure to volatile raw material costs such as pork and poultry prices, potential regulatory changes regarding food safety or labeling, consumer shift toward plant-based alternatives, and currency fluctuations impacting international operations.
What is HRL's competitive advantage?
Hormel benefits from a robust portfolio of heritage brands with strong customer loyalty, significant economies of scale in meat processing, and an extensive distribution network reaching millions of retail outlets.
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Not financial advice. All content is for informational purposes only. Data may contain errors. Consult a qualified financial advisor before making investment decisions.