AUSTIN, MINN.— After an underperforming 2024, Hormel is looking to rebound in 2025 through the growth of its value-added and premium brands—which include Planters, Spam, Applegate, Jennie-O, Wholly Guacamole and Black Label bacon—but that recovery might not be fully realized until later this year, according to James Snee, president, chief executive officer and director, Hormel Foods Corp.

“We grew organic net sales 1% in the first quarter, which is encouraging given the dynamic consumer environment,” Snee said. “In retail, focusing our resources on our flagship and rising brands has proven to be highly effective. We grew overall volume and net sales for these brands, led by Spam, Applegate natural and organic meats, Hormel Black Label bacon and Jennie-O lean ground turkey.

For the first quarter ended January, 26, 2025, Hormel reported net earnings of $171 million, equal to 31¢ on the common stock, down from $219 million in net earnings and 40¢ per share on the common stock the quarter prior. Net sales also fell to $2.98 billion, down from $2.99 billion a year ago.

Retail sales volume dropped 3.7% to $737 million, down from $765 million the quarter prior. Net retail sales also declined 1.1% to $1.89 billion, compared to $1.91 billion a year ago. Foodservice sales were up 1.9% to $930 million from $913 million compared to last year, while premium prepared proteins for foodservice had double-digit net sales growth for the fifth consecutive quarter.

“I am confident in our team’s ability to build on the momentum we experienced in the first quarter with our flagship and rising brands,” Snee said. “The breadth of our portfolio will continue to allow us to navigate the consumer environment. Expect to see innovative solutions addressing convenience and flavor needs launching in the coming months, along with continued advertising support for our key brands to drive profitable top-line growth.” 

Snee noted a recent success regarding flavor innovation was with Spam and its rollout of Korean BBQ and Gochujang flavors last year, along with the debut of Spam Norimaki in chain retail sushi sections.

Turkey business

Snee said Hormel’s whole-bird turkey business continues to be a challenge, but the company is taking steps in 2025 to mitigate turkey’s burden on Hormel’s bottom line.

“We’ve experienced some pressures, especially in the near term, on our turkey supply chain. So, as we’re thinking about that for the balance of the year, we’ve had to take some strategic pricing actions that are in place,” Snee said. “And although we won’t recognize the benefit of that in Q2…we will get the benefit in Q3 and Q4.”

Jacinth Smiley, executive vice president and chief financial officer, Hormel Foods, added, “As anticipated, we experienced negative impacts from lower year-over-year, whole-bird turkey market and lower investment income. Additionally, we face incremental headwinds as we navigated the supply chain impact of bird diseases and commodity market input costs, which were significantly higher year-over-year and above our expectations.”

While the volatile whole-bird turkey market has been difficult for Hormel to navigate, the company sees an opportunity for its value-added turkey products to increase sales once GLP-1 weight-loss drugs become more widely used by consumers.

“It’s very early days on GLP-1, still a lot to learn about the impacts of GLP-1, but some of the early research we are seeing shows that in addition to fresh fruit for weight management products, poultry and fish are among the highest growth categories experiencing increased consumption for those on GLP-1,” said John Ghingo, executive vice president-retail, Applegate Farms. “Then you look at it from a lifestyle and usage perspective. Ground turkey is a very versatile option for consumers. It plugs in very well for everyday life and different food experiences. So, with the number-one brand nationally in Jennie-O and ground turkey, we’re in a great position to capitalize on that growing consumer market.”

Another commodity move Hormel made during the first quarter was divesting the company’s last owned, non-core sow farm operation called Mountain Prairie, resulting in a loss on the sale. “This was our last connection to vertically integrated pork, further demonstrating our commitment to reducing commodity exposure and simplifying our portfolio,” Snee said.

Snee detailed the Planters business and what the company will look for the rest of the year.

“A key driver of retail’s momentum is the recovery of our Planters business, our largest flagship brand. The first quarter met our expectations with significant sequential recovery in the marketplace. The team has been taking the right actions to return the brand to top-line growth with improved fill rates, distribution gains and accelerated innovation.”

Planters are recovering from a nut-processing plant shutdown last May that reduced inventory volume and sales while Hormel addressed the issue. The company said Planters was buoyed recently by a strong advertising push around Super Bowl snacking that included several Hormel brands in a single campaign.

“This initiative represents a significant shift in how we show up in the retail space,” Snee said. “We transitioned from individual brand investments to a comprehensive multi-brand media plan while capitalizing on a strategic partnership with ESPN. The scale of our relevant portfolio changed our interactions with customer partners. For example, we doubled our in-store display counts compared to last year and received numerous accolades from our trusted retailers.”

2025 outlook

 Based on first-quarter results, Hormel’s outlook for the rest of 2025 includes organic net sales growth of 1% to 3%, and earnings per share on the common stock between $1.49 and $1.63, down from a previous estimate of $1.51 to $1.65. Hormel is also anticipating incremental benefits from its transformation and modernization (T&M) initiative in the range of $100 million to $150 million.

“We achieved solid top-line results and remain on track to deliver against our 2025 expectations,” Snee said. “The significant sequential market recovery of our Planters business and the on-track performance of our T&M initiative gives us the confidence to deliver on these expectations, but more importantly, drive long-term and sustainable earnings growth.”