“organic net sales growth for three consecutive quarters. Building upon modest gains in the first and second quarters, we achieved an impressive organic net sales increase of 6% in the third quarter.”
— Jeff Ettinger
03Detailed Report
0J5Z.L
Company 0J5Z.L
Period
Q3 2025
CurrencyUSD
Report TypeQuarterly Earnings
GeneratedMay 31, 2026
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Executive Summary
Hormel Foods reported Q3 2025 (calendar quarter ended July 27, 2025) with meaningful top-line momentum but a margin stretch driven by elevated commodity costs. Organic net sales grew 6% year over year, supported by broad-based strength across all three segments. Retail delivered solid volume growth, led by flagship and rising brands; Foodservice outperformed broader industry with continued growth in Planters, Jennie-O, and Hormel Pepperoni; International benefited from China, aided by innovation in China-snacking platforms. However, bottom-line performance lagged as commodity input costs rose sharply in Q3 (approximately 400 basis points of raw material cost inflation), pressuring gross margins and segment profitability.
Key Performance Indicators
Revenue
Decreasing
3.03B
QoQ: 4.62% | YoY: -3.35%
Gross Profit
Decreasing
487.31M
16.07% margin
QoQ: 0.59% | YoY: -6.51%
Operating Income
Decreasing
239.75M
QoQ: -3.46% | YoY: -18.59%
Net Income
Decreasing
183.74M
QoQ: 2.07% | YoY: -16.56%
EPS
Decreasing
0.33
QoQ: 0.00% | YoY: -17.50%
Revenue Trend
Margin Analysis
Financial Highlights
Revenue (GAAP) for Q3 2025: $3.033 billion, down 3.4% year over year and up 4.6% quarter over quarter. Gross profit: $487.3 million, gross margin 16.07% (YoY margin -6.5%, QoQ +0.6%). Operating income: $239.7 million, operating margin 7.90% (YoY -18.6%, QoQ -3.5%). Net income: $183.7 million, net margin 6.06% (YoY -16.6%, QoQ +2.1%). Diluted EPS: $0.33 (YoY -17.5%, QoQ 0%). EBITDA: $320.7 million; EBITDARatio: 10.57%. Organic net sales (Q3) were $3.0 billion, up 6% YoY with organic volume up 4%. Cash flow from operations: $156.7 million; capital expenditures: $72.2 million; free cash flow: $84.5 million. Cash and cash equivalents: $599.2 million; total debt: $2.86 billion; net debt: $2.26 billion. Key liquidity and leverage metrics: current ratio 2.47, debt-to-equity 0.353, debt ratio 0.212, payout ratio 0.868, dividend yield ~1.02% (per reported ratios).
Income Statement
Metric
Value
YoY Change
QoQ Change
Revenue
3.03B
-3.35%
4.62%
Gross Profit
487.31M
-6.51%
0.59%
Operating Income
239.75M
-18.59%
-3.46%
Net Income
183.74M
-16.56%
2.07%
EPS
0.33
-17.50%
0.00%
Key Financial Ratios
Gross Profit Margin
Weak
16.10%
Gross profit margin is below industry norms, profitability concerns
Operating Profit Margin
Fair
7.90%
Operating margin is moderate, room for improvement in cost management
Net Profit Margin
Fair
6.06%
Net profit margin is moderate, room for improvement in cost management
Return on Assets
Weak
1.36%
Return on assets suggests inefficient capital allocation
Return on Equity
Weak
2.27%
Return on equity suggests inefficient capital allocation
Current Ratio
Healthy
2.47
Current ratio shows adequate liquidity to meet short-term obligations
Debt to Equity
Moderate
0.35
Debt-to-equity indicates balanced capital structure with manageable debt
P/E Ratio
Fair Value
21.37x
P/E ratio in line with market averages
Price to Book
Fair Value
1.94x
Price-to-book ratio reasonable for profitable companies
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