Packaged foods company Hormel (NYSE: HRL) met Wall Street’s revenue expectations in Q1 CY2025, but sales were flat year on year at $2.90 billion. The company’s outlook for the full year was close to analysts’ estimates with revenue guided to $12.1 billion at the midpoint. Its non-GAAP profit of $0.35 per share was in line with analysts’ consensus estimates.
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Hormel Foods (HRL) Q1 CY2025 Highlights:
- Revenue: $2.90 billion vs analyst estimates of $2.91 billion (flat year on year, in line)
- Adjusted EPS: $0.35 vs analyst estimates of $0.34 (in line)
- Adjusted EBITDA: $312.3 million vs analyst estimates of $324.4 million (10.8% margin, 3.7% miss)
- The company slightly lifted its revenue guidance for the full year to $12.1 billion at the midpoint from $12.05 billion
- Management lowered its full-year Adjusted EPS guidance to $1.63 at the midpoint, a 1.2% decrease
- Operating Margin: 8.6%, in line with the same quarter last year
- Free Cash Flow was -$18.64 million, down from $176.2 million in the same quarter last year
- Sales Volumes fell 5.7% year on year (-3.6% in the same quarter last year)
- Market Capitalization: $16.52 billion
Company Overview
Best known for its SPAM brand, Hormel (NYSE: HRL) is a packaged foods company with products that span meat, poultry, shelf-stable foods, and spreads.
Sales Growth
A company’s long-term performance is an indicator of its overall quality. Any business can experience short-term success, but top-performing ones enjoy sustained growth for years.
With $11.92 billion in revenue over the past 12 months, Hormel Foods is one of the larger consumer staples companies and benefits from a well-known brand that influences purchasing decisions. However, its scale is a double-edged sword because it’s harder to find incremental growth when your existing brands have penetrated most of the market. For Hormel Foods to boost its sales, it likely needs to adjust its prices, launch new offerings, or lean into foreign markets.
As you can see below, Hormel Foods’s revenue declined by 1.5% per year over the last three years as consumers bought less of its products.
This quarter, Hormel Foods’s $2.90 billion of revenue was flat year on year and in line with Wall Street’s estimates.
Looking ahead, sell-side analysts expect revenue to grow 3.1% over the next 12 months. Although this projection suggests its newer products will spur better top-line performance, it is still below the sector average.
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Volume Growth
Revenue growth can be broken down into changes in price and volume (the number of units sold). While both are important, volume is the lifeblood of a successful staples business as there’s a ceiling to what consumers will pay for everyday goods; they can always trade down to non-branded products if the branded versions are too expensive.
Hormel Foods’s average quarterly sales volumes have shrunk by 2.4% over the last two years. This decrease isn’t ideal because the quantity demanded for consumer staples products is typically stable. 
In Hormel Foods’s Q1 2025, sales volumes dropped 5.7% year on year. This result represents a further deceleration from its historical levels, showing the business is struggling to move its products.
Key Takeaways from Hormel Foods’s Q1 Results
It was encouraging to see Hormel Foods’s slightly raise its full-year revenue guidance. On the other hand, its EBITDA missed and it lowered its full-year EPS guidance. Overall, this quarter could have been better. The stock remained flat at $29.83 immediately after reporting.
Hormel Foods may have had a tough quarter, but does that actually create an opportunity to invest right now? When making that decision, it’s important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it’s free.
