HRL 10-K & 10-Q changes, risk factors and insider trading
Hormel Foods Corp. · NYSE · Meat Packing Plants · CIK 48465 · All filings on SEC.gov
At a glance
What changed in the latest 10-K
Risk Factors
Largest changes
“Litigation and other legal proceedings may adversely affect the Company's reputation, results of operations, and financial condition. The Company is regularly involved in a variety of legal proceedings, including litigation, arbitration, claims, investigations, and inquiries. The frequency of any such proceedings could increase in the future. …”see in full comparison
“The potential impacts of a changing climate could have an adverse impact on the Company’s results of operations and financial condition. The potential impacts of a changing climate may be widespread and unpredictable and present a variety of risks in the short-term and long-term. …”see in full comparison
“The Company may be adversely impacted if the Company is affected by cybersecurity attacks or other security breaches. IT systems are an important part of the Company’s business operations. The Company also increasingly relies upon third-party service providers for a variety of business functions, including cloud-based services. The Company has programs in place to prevent, detect, contain, and respond to cyber incidents. …”see in full comparison
“The Company’s operations are subject to the general risks of litigation. The Company is involved on an ongoing basis in litigation arising in the ordinary course of business. Trends in litigation may include class actions involving employees, consumers, competitors, suppliers, shareholders, or others, and claims relating to product liability, contract disputes, antitrust regulations, intellectual property, advertising, labeling, wage and hour laws, employment practices or environmental matters. …”see in full comparison
“There have been, and may continue to be, changes in the legal or regulatory environment (including as a result of executive orders) affecting many areas related to the Company's business, including raw material costs and availability, energy costs and availability, workforce availability, transport costs and capacity, information security, cybersecurity, and data privacy, supply chain requirements, food safety, environmental, social, and governance matters, and climate and emissions disclosure. …”see in full comparison
“Additionally, the Company is subject to new or modified laws, regulations, and accounting standards. The Company’s failure or inability to comply with such requirements could subject the Company to civil remedies, including fines, injunctions, recalls or seizures, as well as potential criminal sanctions.”see in full comparison
Full comparison: every changed paragraph (71)
Deterioration of economic conditions could harm the Company’s business. The Company’s business may be adversely affected by changes in national or global economic conditions, including inflation, interest rates, tax rates, availability of capital, energy availability and costs (including fuel surcharges), political developments, civil unrest, terrorist attacks, armed conflicts, public health crises, legal and regulatory actions, immigration policies and trends, and the effects of governmental initiatives to manage economic conditions.conditions, Decreasesincluding inthrough consumerthe spendingimposition ratesof tariffs, quotas, trade barriers, and shiftsother in consumer product preferences could also negatively impact the Company.restrictions.
VolatilityAny of these or other changes in financial markets and the deterioration of national and global economic conditions could adversely impact the Company’s results of operations and financial condition, including as follows:
▪The imposition of tariffs, quotas, trade barriers, or other restrictions could increase the cost of key inputs or reduce their availability. In particular, recent U.S. tariffs imposed or threatened to be imposed on a variety of countries, and any retaliatory actions taken by such countries, could result in the Company incurring additional costs to procure key inputs.
▪Fuel and transportation costs may become inflated and there may be supply chain shortages and delays, as has occurred in recent years.
The Company has no manufacturing operations in Russia, Ukraine, or the Middle East, yet it has experienced inflated fuel costs and supply chain shortages and delays due to the impact of the military conflicts on the global economy. If these conflicts or others arise or escalate further, the Company could, among other things, face additional supply chain disruptions, rising prices for oil and other commodities, volatility in capital markets and foreign exchange rates, rising interest rates, or heightened cybersecurity risks, any of which may adversely affect the Company’s business.
The Company manages its exposure to commodity prices through hedging programs that utilize hedge accounting, where qualified, for financial reporting purposes. ▪Volatile fluctuations in market conditions could cause thesethe Company's hedging instruments for its exposure to commodity prices to become ineffective, which could require any gains or losses associated with these instruments to be reported in the Company’s earnings each period. These instruments may limit the Company’s ability to benefit from market gains if commodity prices become more favorable than those secured under the Company’s hedging programs.
If a highly pathogenic human disease outbreak developed, such as COVID-19, it may negatively impact the global economy, demand for Company products, the supply chain, the Company’s co-manufacturers, and/or the Company’s workforce availability including leadership, and the Company’s financial results could suffer. The Company has developed contingency plans to address infectious disease scenarios and the potential impact on its operations and will continue to update these plans, as necessary. There can be no assurance given, however, that these plans will be effective in eliminating the negative effects of any such diseases on the Company’s operating results.
The Company’s operations are subject to the general risks associated with acquisitions, joint ventures, equity investments, and divestitures. The Company regularly reviews opportunities to support the Company’s strategic initiative of delivering long-term value to shareholders through acquisitions, joint ventures, and equity investments and to divest non-strategic assets. The Company has made several acquisitions, joint ventures, equity investments, and divestitures in recent years, including the purchase of a minority interest in Garudafood in fiscal 2023 and the divestituredivestitures of Hormel Health Labs, LLC in fiscal 2024.2024 and Mountain Prairie, LLC in fiscal 2025. Potential risks associated with these transactions include the inability to consummate a transaction timely or on favorable terms, diversion of management’s attention from other business concerns, loss of key employees and customers of current or acquired companies, inability to integrate or divest operations successfully, assumption of unknown liabilities, disputes with buyers, sellers, or partners, inability to obtain favorable financing terms, and the inherent risks in entering markets or lines of business in which the Company has limited or no prior experience. There is also the risk of post-acquisition impairment charges if purchase assumptions are not achieved.achieved, which could adversely affect the Company's results of operations and financial condition. For example, based on an assessment in the fourth quarter of fiscal 2025 and in connection with the preparation of the Company's consolidated financial statements, the Company initiated an impairment review of its investment in Garudafood and concluded that the decline in fair value was no longer believed to be temporary. As a result, the Company recognized a $163.7 million impairment charge to reduce the investment's carrying amount to estimated fair value.
The Company’s level of indebtedness may increase to fund future acquisitions, joint ventures, or equity investments.investments in the future. Higher levels of debt may, among other things, impact the Company’s liquidity or credit rating and increase the Company’s exposure to negative fluctuations in interest rates.
Any of these risksoutcomes could adversely impact the Company’sCompany's reputation, results of operations, and financial results and business reputation.condition.
Risks and uncertainties associated with intangible assets, including any future goodwill or intangible asset impairment charges, may negatively impact the Company. The Company’s goodwill and indefinite-lived intangible assets are initially recorded at fair value and are not amortized but are reviewed for impairment annually or more frequently if impairment indicators arise. Impairment testing requires significant judgment around estimates and assumptions and is impacted by factorsvarious suchfactors, asincluding revenue growth rates, operating margins, tax rates, royalty rates, and discount rates. An unfavorable change in any of these factors may lead to the impairment of goodwill and/or intangible assets. During fiscal 2023, an impairment was indicated for the Justin’s® trade name, resulting in an impairment charge of $28.4 million. In addition, during fiscal 2023, the Company recorded a $7.0 million impairment charge related to a corporate venturing investment to recognize a decline in fair value not believed to be temporary.
During the Company’s fiscal 2025 quantitative impairment testing, the International reporting unit with a goodwill balance of $258.9 million was identified as having modest fair value in excess of its carrying amount and is considered at heightened risk of impairment. Separately, impairments were recognized on the Planters® and Chi-Chi's® trade names for $59.1 million and $2.9 million, respectively. The Justin’s® trade name was also identified as having heightened risk of impairment. As of October 26, 2025, the total carrying value of indefinite-lived intangible assets considered at heightened risk, including the trade names impaired, was $683.3 million. If the Company continues to face unfavorable changes in any of the factors impacting its intangible assets, the Company may be required to record impairment charges in connection with such assets, which could adversely affect the Company's results of operations and financial condition.
Fiscal 2024 net sales for Planters® snack nuts were negatively impacted by production disruptions at the Suffolk, Virginia, facility. The Company believes these impacts are short term in nature (less than one year) and projects sales to recover to historical levels shortly after supply normalizes. Should the impact last longer, or be more severe than currently anticipated, it is likely the Company would have to recognize an impairment charge on this trade name, which is currently valued at $675 million.
The Company is subject to the risk of disruption of operations, including at owned facilities, co-manufacturers, suppliers, logistics providers, customers, or other third-party service providers. The Company’s ability, and the ability of the Company’s co‑manufacturers, suppliers, and logistics providers to manufacture, supplysupply, and distribute the Company’s products is critical to the Company’s success. A significant disruption in the operation of the Company’s manufacturing, supply, or distribution capabilities, whether Company-owned or supported by third parties, could have a negative impact on the Company’s ability to operate its business.business, particularly if such a disruption were to occur at a facility that supports a meaningful amount of the Company’s production, such as its Austin, Minnesota manufacturing facility. For example, in the fourth quarter of fiscal 2025 a fire occurred at the Company’s Little Rock, Arkansas, peanut butter production facility, which negatively impacted production at the facility. Actions taken to mitigate the impact of any potential disruption, including investing in capital improvements, redundant supply, or increasing inventory in anticipation of a potential production or supply interruption, may adversely affect the Company’s financialresults results.of operations. Additionally, labor-related challenges have caused disruptions for many of theseCompany providers andin maythe continuepast. toIf the Company’s owned facilities, or key co-manufacturers, suppliers, or logistics providers experience significant labor-related challenges in the future, it could impact the Company’s ability to receive inputs or distribute products. Any of these outcomes could adversely affect the Company's results of operations and financial condition.
The Company relies on its customers to sell its products to ultimate consumers. DisruptionsAny relateddisruption to a significant customerscustomer or sales channelschannel could result in a reduction in sales or a change in the mix of products sold.sold, which could adversely affect the Company's results of operations.
The Company also relies on a variety of third-party service providers to support its operations. DisruptionAny indisruption to services from third-party service providers used to support business functions such as benefit plan administration, payroll processing, information technology (IT), and cloud computing services could haveadversely a negative impact onaffect the Company’sCompany's business.business, results of operations, and financial condition.
The Company may not realize the anticipated cost savings or operating profit improvements associated with strategic initiatives, including its Transform and Modernize initiative. The Company implements strategic initiatives to achieve a profitable cost structure, operate more profitably,efficiently, better serve customers, and optimize cash flow. These initiatives may focus on opportunities to improve the procurement, manufacturing, and logistics within the Company’s supply chain as well as general and administrative processes. A failure or delay in implementing the improvements associated with these strategic initiatives could adversely impact the Company’s results,results of operations, ability to meet its long-term growth expectations, and ability to fund future initiatives.
The Company began its Transform and Modernize initiative in the second half of fiscal 2023 with a goal of contributing meaningful operating profit growth through fiscal 2026. If this initiative does not achieve the expected financial impact in the aggregate or on the expected timeline, the Company’s financialresults resultsof operations and ability to meet its long-term growth expectations could be adversely impacted.
Furthermore, in the fourth quarter of fiscal 2025, the Company commenced a corporate restructuring plan, the focus of which is to reduce administrative expenses, improve efficiencies, and align the workforce to the Company’s future needs, while enabling continued investment in the Company’s growth. The program includes a voluntary early retirement program for certain groups of employees, the closing of certain open roles, involuntary role reductions, and making select changes to benefit programs. If the Company is unable to fully realize the anticipated benefits of this corporate restructuring plan, including the reduction of expenses and the enablement of continued investment in the Company's growth, the Company's results of operations could be adversely impacted.
In addition, the Company is in the midst of multi-year data and technology transformation projects to achieve better analytics, customer service, and process efficiencies,efficiencies and to upgrade technologies. The projects, including updating the Company’s order-to-cash process, are expected to improve the efficiency and effectiveness of certain financial and business transaction processes and the underlying systems environment. Multiple phases of these projects have already been implementedimplemented, and additional phases are expected to be implemented in the upcoming years. These implementations are a major undertaking from a financial, management, and personnel perspective and may prove to be more difficult, costly, or time consuming than expected, and there can be no assurance that these projects will be beneficial to the extent anticipated. Any of these outcomes could adversely affect the Company's results of operations and financial condition.
The Company is subject to risk of the loss of a significant contract or unfavorable changes in the Company’s relationships with significant customers. The Company is a party to several supply, distribution, contract packaging and other significant contracts. The loss of a significant contract or failure to obtain new significant contracts could adversely affect the Company’s financial results.
The Company is subject to the risk of unfavorable changes in the Company’s relationships with significant customers, suppliers, distributors, and other third parties. Sales to the Company's largest customer, Walmart, accounted for approximately 16 percent of consolidated gross sales less returns and allowances during fiscal 2024.2025. Walmart is a customer for the Company’s Retail and International segments. The Company’s top five customers collectively represented approximately 3738 percent of consolidated gross sales less returns and allowances during fiscal 2024.2025. The loss of one or more of the top customers in any of the reportable segments could haveadversely aaffect materialthe adverseCompany's effectresults uponof suchoperations segment’sand financial results.condition.
The Company relies on suppliers, distributors, and other third parties to source key inputs, deliver products to customers, and support its operations. Any termination of, or adverse change in, the Company's relationship with any of these companies could decrease the Company's sales, increase the Company's costs, and negatively impact the Company's results of operations.
The Company may be adversely impacted if the Company is affected by cybersecurity attacks or other security breaches. IT systems are an important part of the Company’s business operations. The Company also increasingly relies upon third-party service providers for a variety of business functions, including cloud-based services. The Company has programs in place to prevent, detect, contain, and respond to cyber incidents. However, the Company may be unable to anticipate security incidents, detect attacks, or implement adequate preventive measures as cyber threats continue to evolve and cyberattacks have become more sophisticated and frequent, including through the use of enhanced technologies and capabilities (such as artificial intelligence) by threat actors with a wide range of expertise and motives. For example, threat actors have increasingly targeted organizations in the U.S. and internationally with sophisticated ransomware attacks, which the Company may be unable to anticipate, detect, or contain. In addition, hardware or software that the Company develops or obtains from third parties may contain defects that could compromise the Company's IT systems. Unauthorized parties may also attempt to gain access to the Company's IT systems or facilities, or those of third parties with whom the Company does business, through fraud, deception, social engineering, or other bad acts. Errors or malicious actions by the Company's team members or contractors and other vulnerabilities or irregularities could also negate the Company's security measures or those of third parties with whom the Company does business and result in a compromise or breach of the Company's or their IT systems. The utilization of hybrid and remote work by the Company's team members, suppliers, and other third parties has amplified the Company's already extensive reliance on IT systems and unimpeded internet access. Furthermore, the training the Company conducts as part of information security and cybersecurity efforts may not be effective in preventing or limiting successful attacks.
The Company and third parties with whom it does business face attempts by others to gain unauthorized access to, sabotage, take control of, and corrupt, its or their IT systems and data. As a result of these types of attempts, both the Company and third parties with whom it does business have experienced information security, cybersecurity, and data privacy incidents. None of these incidents have had a material impact on the Company's business strategy, results of operations, or financial condition. If the Company or third parties with whom the Company does business experience additional significant information security, cybersecurity, or data privacy incidents or fail to detect and appropriately respond to significant incidents, the Company's business operations could be severely disrupted and it could be exposed to costly government enforcement actions and private litigation. In addition, the Company's customers and consumers could delay, reduce, or cease purchases of the Company's products. Any of these outcomes could adversely affect the Company's reputation, results of operations, and financial condition.
The Company may be adversely impacted if the Company is affected by cybersecurity attacks, security breaches, or other IT interruptions, involving its own systems or those with whom it does business. IT systems are an important part of the Company’s business operations. The Company also increasingly relies upon third-party service providers for a variety of business functions, including cloud-based services. Cyber incidents are occurring more frequently across U.S. industries and are being made by groups and individuals with a wide range of motives and expertise. In addition, high-profile data security incidents and IT interruptions at other companies, including companies with whom the Company does business, evidence an external environment that is becoming increasingly challenging. From time to time, the Company has experienced, and may experience in the future, breaches of security measures due to human error, malfeasance, insider threats, system errors or vulnerabilities or other irregularities, none of which have been material to date. In addition, from time to time the Company has experienced disruptions to its operations due to IT interruptions at third parties with whom it does business. To date, none of these have been material.
Although the Company has programs in place related to business continuity, disaster recovery, and information security initiatives to maintain the confidentiality, integrity, and availability of systems, business applications, and customer information, the Company may not be able to anticipate or implement effective preventive measures against all potential IT interruptions or cybersecurity threats, especially because, in connection with cybersecurity threats the techniques used change frequently and because attacks can originate from a wide variety of sources, both domestic and foreign. Cybersecurity risk cannot be fully mitigated because of the rapidly evolving nature of the threats, targets, and consequences.
If the Company experiences a loss or significant disruption in its operations due to a cybersecurity event or other IT interruption, the Company may suffer reputational, competitive, and business harm and may be exposed to legal liability, which may adversely affect the Company’s results of operations.
A significant disruption to the Company's IT systems and the Company's failure to adequately maintain and update those systems could adversely affect the Company's operations. The Company mayrelies beextensively on IT systems throughout its business. The Company also relies on continued and unimpeded access to the internet to use its IT systems. These systems are subject to possible damage or interruption from many events, including power and other outages, telecommunications failures, third-party failures, malicious attacks, security breaches, unplanned downtime, program transitions, and implementation errors. Any damage or disruption to the Company's IT systems could severely interrupt the Company's business operations, including the Company's ability to develop, process, and distribute its products, which could adversely affectedaffect ifits itreputation, failsresults toof timelyoperations, replaceand legacyfinancial technologies.condition. The Company has been evolving its IT infrastructureinfrastructure, but continues to rely on a variety of legacy technologies across its business. The Company ishas investinginvested, significantand fundsexpects to updatecontinue investing, in updates to its IT infrastructure.and security infrastructure and capabilities. If the Company fails to timelyeffectively completeimplement thisthese work,updates, the risk of an adverse cybersecurity incident may increase, if,including for example,example if vendors fail to continue to provide security updates.updates for legacy technologies. Reliance on legacy technology for an extended period may also increase the Company’s IT maintenance expense and risk of system downtime, as well as slow the Company’s adoption of more innovative technologies or ability to benefit from more sophisticated data analytics. In addition, problems and interruptions associated with implementing technology initiatives could adversely affect the Company's operational efficiency. Any of these outcomes could adversely affect the Company's results of operations and financial condition.
Deterioration of labor relations, labor availability or increases in labor costs could harm the Company’s business. The Company's ability to meet its labor needs while controlling its costs is subject to external factors such as labor laws and regulations, labor availability, unemployment levels, prevailing wage rates, benefit costs, changing demographics, immigration laws, regulations, and enforcement policies, and the Company's reputation within the labor market. If the Company is unable to attract and retain a workforce meeting its needs (including for specialized roles with significant competition for talent) or is unable to successfully execute on succession planning and continuity at all levels of the organization, including as a result of the Company's recent corporate restructuring plan, the Company's operations, strategy, and competitiveness could suffer. Any of these outcomes could adversely affect the Company's reputation, results of operations, and financial condition. In addition, a significant increase in labor costs, a reduction of available labor, or a deterioration of labor relations at any of the Company’s owned facilities or co-manufacturing facilities could result in work slowdowns or stoppages, which could adversely affect the Company's reputation, results of operations, and financial condition.
Deterioration of labor relations, labor availability or increases in labor costs could harm the Company’s business. A significant increase in labor costs or a deterioration of labor relations at any of the Company’s owned facilities or co-manufacturing facilities resulting in work slowdowns or stoppages could harm the Company’s financial results. Labor and skilled labor availability challenges could continue to have an adverse effect on the Company’s business.
The Company periodically renegotiates its collective bargaining agreements as such agreements expire. New or increased unionization efforts at a facility or failure to successfully negotiate with existing unions could lead to disruptions in the Company's supply chain, increases in operating costs, and constraints on operating flexibility. Any of these outcomes could adversely affect the Company's reputation, results of operations, and financial condition.
If the Company fails to achieve its projected results or otherwise fails to meet market expectations regarding its financial performance, the price and volatility of its stock could be adversely affected. The Company's results of operations have previously fluctuated from quarter to quarter and may do so again in the future. If the Company fails to achieve its projected results, if its outlook is not aligned with market expectations, if the Company modifies its outlook, if the Company modifies its approach to dividend distributions, or if the Company fails to meet the expectations of investors or securities analysts, the Company's stock price may decline (as it has recently), and the decrease in the stock price may be disproportionate to any shortfall in the Company's financial performance. Additionally, factors such as performance results for the Company's competitors and news or announcements by the Company, its competitors, and other third parties (including governmental entities and officials and non-governmental organizations) may result in a decline and volatility in the Company's stock price.
The Company’s operations are subject to thefood generalsafety and other risks ofinherent to the food industry. The Company's development, production, and distribution of food products manufacturingfor industryhuman isconsumption subjectsubjects it to themany risks posed by a number of factors,risks, including:
▪food contamination caused by disease-producing organisms or pathogens, such as Listeria monocytogenes, Salmonella, and pathogenic E coli.coli., including contamination caused by the introduction of pathogens as a result of improper handling by customers or consumers (over which the Company has no control);
▪food contamination caused by operational errors by suppliers, co-manufacturers, or in Company-owned facilities;
The Company may face litigation, investigations, and regulatory proceedings and be subject to liability if any of these risks materialize, including if consumption of any of the Company's products causes injury, illness, or death. Furthermore, any such events could damage the Company's relationship with its customers and lead to adverse perceptions of the Company's business and consumer boycotts. In addition, the Company may take marketplace action such as a voluntary product recall in the event of contamination or damage to any of the Company's products. For example, during the fourth quarter of fiscal 2025, the Company issued a voluntary, class 1 recall related to certain chicken products sold in foodservice channels. In addition, during the third quarter of fiscal 2024, the Company voluntarily recalled a limited number of Planters® products due to the potential for contamination of the product with Listeria monocytogenes. Although the Company has not been made aware of any reports of illness related to the recalled products in connection with either of these recalls, the Company has experienced costs and business impacts associated with the events. If similar events occur in the future or if any other food safety or food industry risks materialize, the Company's reputation, results of operations, and financial condition could be adversely affected.
The pathogens that may cause food contamination are found generally in livestock and in the environment and thus may be present in the Company’s products. These pathogens can also be introduced to products as a result of improper handling by customers or consumers. The Company does not have control over handling procedures once products have been shipped for distribution.
If one or more of these risks were to materialize, the Company could incur significant costs, loss of sales, regulatory action, or litigation as well as negative impacts to its brand and business reputation.
During the third quarter of fiscal 2024, the Company voluntarily recalled a limited number of Planters® products due to the potential for contamination of the product with Listeria monocytogenes. Although to-date there have been no reports of illness related to the recalled products, the Company has experienced costs and business impacts associated with the event.
Outbreaks of disease among livestock and poultry flocks could harm the Company’s revenues and operating margins. The Company is subject to risks associated with the outbreak of disease in pork and beef livestock, and poultry flocks, including African swine fever (ASF), Bovine Spongiform Encephalopathy (BSE), pneumo-virus, Porcine Circovirus 2 (PCV2), Porcine Reproduction & Respiratory Syndrome (PRRS), Foot-and-Mouth Disease (FMD), Porcine Epidemic Diarrhea Virus (PEDv), and Highly Pathogenic Avian Influenza (HPAI). The outbreak of any such diseases could adversely affect the Company’s supply of raw materials, increase the cost of production, reduce utilization of the Company’s harvest facilities, and reduce earnings. TheAlthough impactthe Company has developed business continuity plans for various disease scenarios, there can be no assurance that these plans will be effective in reducing the negative effects of globalany climatesuch changediseases mayon increasethe theseCompany’s risksresults dueof tooperations. changesIn recent years, outbreaks of ASF have impacted hog herds in weatherChina, orAsia, migratoryEurope, patterns, which may result in certain types of diseases occurring more frequently or with more intense effects. Additionally,and the Caribbean. If an outbreak of diseaseASF maywere hinderto occur in the U.S., the Company’s abilitysupply of hogs and pork could be significantly impacted. Furthermore, HPAI was detected within the Company’s turkey supply chain during fiscal 2024 and fiscal 2025. HPAI could continue to marketbe detected in the future. Future impacts of HPAI could reduce the production volume in the Company’s turkey facilities. The Company continues to monitor the situation and sellwill productstake bothappropriate domesticallyactions andto internationally.protect the health of the turkeys across the supply chain.
The impact of a changing climate may also increase disease risks due to changes in weather or migratory patterns, which may result in certain types of diseases occurring more frequently or with more intense effects. Additionally, the outbreak of disease may hinder the Company’s ability to market and sell products both domestically and internationally.
Any of these outcomes could adversely affect the Company's results of operations and financial condition.
In recent years, outbreaks of ASF have impacted hog herds in China, Asia, Europe, and the Caribbean. If an outbreak of ASF were to occur in the U.S., the Company’s supply of hogs and pork could be materially impacted.
HPAI was detected within the Company’s turkey supply chain during fiscal 2024 and the first quarter of fiscal 2025. HPAI could continue to be detected in the future. The impact of HPAI has reduced and the Company believes it will continue to reduce production volume in the Company’s turkey facilities. The Company is continuing to monitor the situation and will take appropriate actions to protect the health of the turkeys across the supply chain.
The Company has developed business continuity plans for various disease scenarios and will continue to update these plans, as necessary. There can be no assurance given, however, that these plans will be effective in eliminating the negative effects of any such diseases on the Company’s operating results.
Fluctuations in commodity prices and availability of raw materials and other inputs could harm the Company’s earnings.results of operations. The Company’s results of operations and financial condition are largely dependent upon the cost and supply of pork, poultry, beef, feed grains, nuts, energy, and other inputs, as well as the selling prices for many of the Company’s products, which are determined by dynamic market forces of supply and demand.
The Company takes a balanced approach to sourcing pork raw materials, including hogs purchased for the Austin, Minnesota processing facility, long-term supply agreements for pork, and spot market purchases of pork. This approach is designed to ensure a more stable supply of raw materials while minimizing extreme fluctuations in costs over the long-term.long Thisterm. However, this may result, in the short-term,short term, in higher or lower live hog costs compared to the cash spot market. Market-based pricing on certain product lines, and lead time required to implement pricing adjustments, may prevent all or part of these cost increases from being recovered, and these higher costs could adversely affect the Company’s short-term financial results.
The Company may be subject to decreased availability or less favorable pricing for nuts, tomatoes, avocados, or other produce if poor growing conditions have a negative effect on agricultural productivity. Reductions in crop size or quality due to unfavorable growing conditions may have an adverse effect on the Company’s results. The supplies of natural and organic proteins may impact the Company’s ability to ensure a continuing supply of these products.
The supplies of natural and organic proteins may impact the Company’s ability to ensure a continuing supply of these products. To mitigate this risk, the Company partners with multiple long-term suppliers.
Any fluctuations in commodity prices or the availability of raw materials and other inputs necessary for the Company's business could adversely affect the Company's results of operations and financial condition.
Market demand for the Company’s products may fluctuate, including due to private labelprivate-label products and lower-priced alternatives. The Company faces competition from a variety of sources, including other national brands, private label producers, and producers of alternative meats and protein sources, including pork, beef, turkey, chicken, fish, nuts, nut butters, whey, and plant-based proteins. The factors on which the Company competes include:
For certain products and product categories there has been, and the Company expects there to continue to be, a consumer shift towards more generic, lower-priced, or other value offerings, including private label products, which could result in lower sales, reduced margins, and lower market share for the Company's products.
Demand for the Company’s products is also affected by competitors’ promotional spending, the effectiveness of the Company’s advertising and marketing programs, and consumer perceptions, including those related to food trends such as sustainability of product sources and animal welfare. The Company’s failure to compete successfully on any of these or other factors could lead to, among other things, reduced demand for the Company’s brands and products, which could negatively impact the Company’s financial condition and results of operations.operations and financial condition.
The Company faces risks related to its ability to respond to changing consumer preferences, diets and eating patterns, including through its innovation and marketing investments. The Company invests in consumer insights and research and development to deliver innovative products that resonate with consumers, appeal to customers, and support sales growth. Consumer preferences for food products are impacted by a variety of factors, including convenience, flavor varietyvariety, and developments in options for weight management (e.g., the use of medications). If the Company is unsuccessful in developing and introducing new products that resonate with consumers, the return on the Company’s investment in new product development will be less than anticipated and the Company’s efforts to grow sales through innovation will be less successful than expected. Any of these outcomes could adversely affect the Company's results of operations and financial condition.
Damage to the Company’s reputation or brand image could adversely affect its business. Maintaining and enhancing the reputation of the Company and its key brands is critical to the Company's business success. The Company's reputation is largely based on perceptions. It may be difficult to address negative publicity or sensationalism across media channels, regardless of its accuracy or the reputability of its source, including as a result of fictitious media content (such as content produced by artificial intelligence or bad actors). Negative incidents (including those based on differing perspectives or opinions) involving the Company, its brands, its workforce, or others with whom the Company does business could quickly erode trust and confidence and result in changes in behavior including consumer boycotts, workforce unrest or walkouts, government investigations, and litigation. Negative reputational incidents or negative perceptions of the Company or its brands could adversely affect the Company's business and results of operations, including through lower sales, the termination of business relationships, higher costs, and team member engagement, retention, and recruiting difficulties. The Company has previously experienced negative perceptions of its business, and it could experience similar occurrences in the future. Any of these outcomes could negatively impact the Company's reputation, results of operations, and financial condition.
The Company previously established, and may continue to establish, various goals and initiatives regarding environmental, social, and governance matters, including with respect to sustainability. The Company has modified, and may continue to modify, certain of these goals and initiatives from time to time. The Company's establishment and continuation of any goals or initiatives regarding environmental, social, and governance matters, any modification or termination of such goals or initiatives, or any failure or perceived failure by the Company to achieve them, could result in negative reactions from the Company's shareholders, customers, consumers, team members, suppliers, and other third parties (including governmental entities and officials and non-governmental organizations) and lead to adverse perceptions of the Company's business, consumer boycotts, litigation, investigations, and regulatory proceedings. Any of these outcomes could negatively impact the Company's reputation, results of operations, and financial condition.
Reputational harm can also occur indirectly through companies and others with whom the Company does business or who sell the Company's products. In addition, the Company has previously had, and may in the future have, relationships with celebrities, influencers, and other individuals, including for advertising campaigns and marketing programs. If consumers have negative experiences with, or view unfavorably, any of the companies or individuals with whom the Company has relationships, it could cause them to reduce or stop purchasing the Company's products, which could adversely affect the Company's results of operations.
The potential impacts of a changing climate could have an adverse impact on the Company’s results of operations and financial condition. The potential impacts of a changing climate may be widespread and unpredictable and present a variety of risks in the short-term and long-term. The physical effects of a changing climate, such as natural disasters, extreme weather conditions, drought, and rising sea levels, could adversely affect the Company's results of operations, including by reducing the availability of necessary raw materials, increasing the cost of raw materials, increasing its energy costs, disrupting its supply chain, negatively impacting its workforce, damaging its facilities, and threatening the habitability of the locations in which the Company operates. In addition to physical risks, the potential impacts of a changing climate also present transition risks, including regulatory and reputational risks. For example, the Company uses commodities and energy inputs in its operations that may face increased regulation due to a changing climate or other environmental concerns, which could increase the Company's costs. Furthermore, the Company's establishment and continuation of sustainability goals and initiatives, or any modification, conclusion, failure, or perceived failure by the Company to achieve them, or to otherwise meet evolving, varied, and potentially conflicting expectations from the Company's shareholders, customers, consumers, team members, suppliers, and other third parties (including governmental entities and officials and non-governmental organizations) regarding the environment and the Company's goals and initiatives, could lead to adverse perceptions of the Company's business, consumer boycotts, litigation, investigations, and regulatory proceedings. Any of these outcomes could adversely affect the Company's reputation, results of operations, and financial condition.
Damage to the Company’s reputation or brand image can adversely affect its business. Maintaining and enhancing the perception of the reputation of the Company and its key brands is critical to business success. The reputation of the Company and its brands have been in the past, and could in the future be, adversely impacted by a number of factors, including unfavorable events or rumors, adverse publicity, and negative information disseminated through social and digital media. Failure to maintain, extend, and expand the Company’s reputation or brand image could adversely impact operating results.
Management's Discussion & Analysis (MD&A)
New heading “Gain (Loss) on Sale of Business”
New heading “Corporate Restructuring Plan”
New heading “Organic Volume and Organic Net Sales (Non-GAAP)”
New heading “Contractual Obligations”
Removed heading “Executive Overview”
Removed heading “Volume and Net Sales”
Removed heading “Arbitration Ruling”
Removed heading “Gain on Sale of Business”
Removed heading “Organic Net Sales”
Removed heading “Fiscal 2025 Outlook - Organic Net Sales (Non-GAAP)”
Largest changes
(see in full comparison21) Retail and International segment profitadjustment(loss) adjustments in fiscal20232025iswere due toannon-cash impairmentcharge associated with the Justin’s® trade name.charges. Net Unallocated Expense adjustments in fiscal20232025 were comprised ofan unfavorable arbitration ruling, impairment charge associated with a corporate venturing investment, andnon-recurring T&M initiativecosts.costs, corporate restructuring plan charges, the loss on sale of Mountain Prairie, LLC, and litigation settlements.
(see in full comparison21) Retail and International segment profitadjustment(loss) adjustments in the fourth quarter of fiscal20232025iswere due toannon-cash impairmentcharge associated with the Justin’s® trade name.charges. Net Unallocated Expense adjustmentsfor the fourth quarter of fiscal 2023were comprised ofan unfavorable arbitration ruling, impairment charge associated with a corporate venturing investment, andnon-recurring T&M initiativecosts.costs, corporate restructuring plan charges, and a favorable litigation settlement.
“During the fourth quarter of fiscal 2025, the Company elected to perform a quantitative assessment of goodwill. No goodwill impairment charges were recorded as a result of the testing. The estimated fair value for the Retail and Foodservice reporting units exceeded the calculated carrying value by more than 20 percent. The International reporting unit, with a goodwill carrying value of $258.9 million as of October 26, 2025, was identified as being at heightened risk of impairment. …”see in full comparison
“Fiscal 2024: The Company believes fiscal 2024 demonstrated the solid execution of its strategy, the power of its portfolio and the resilience of its team. The Company achieved net sales of $11.9 billion, declining 2 percent compared to the prior year, as the benefit from broad-based growth in the Foodservice segment and value-added growth in the Retail segment from Applegate®, value-added fresh pork, bacon, and value-added turkey, was more than offset by declines in the Retail and International segments. …”see in full comparison
In the fourth quarter of fiscalsee in full comparison2023,2025, the Companyincurredrecorded non-cash impairment chargesassociatedrelatedwithto certain intangible assets and an equity method investment. See Note C - Goodwill and Intangible Assets and Note D - Investments in Affiliates of theJustin’s®NotestradetonametheandConsolidatedaFinancialcorporateStatementsventuringforinvestment.additional information. The Company believesthat non-recurring costs fortheseimpairments are not reflective of the Company’s ongoing operating cost structure,charges are not indicative of the Company’s core operating performance, do not reflect expected future operating income or costs, andmayare notbemeaningful when comparing the Company’s operating performance against that of priorperiods;periods.therefore, theThe Companyisadjustsexcludingfor (i.e., excludes) thesediscrete costs.impacts.
Full comparison: every changed paragraph (160)
The Company is a global manufacturer and marketer of branded food products and remains focused on driving long-term growth through a balanced business model, a diverse portfolio, and a commitment to creating value for all stakeholders. The Company reports its results in the following three reportable segments: Retail, Foodservice, and International.
Executive Overview
Fiscal 2024: The Company believes fiscal 2024 demonstrated the solid execution of its strategy, the power of its portfolio and the resilience of its team. The Company achieved net sales of $11.9 billion, declining 2 percent compared to the prior year, as the benefit from broad-based growth in the Foodservice segment and value-added growth in the Retail segment from Applegate®, value-added fresh pork, bacon, and value-added turkey, was more than offset by declines in the Retail and International segments. Declines in the Retail segment were driven primarily by significant year-over-year pricing declines for whole bird and commodity turkey and softness in the Convenient Meals & Proteins vertical. International net sales declines were driven by lower commodity exports and lower net sales in China. Segment profit increased 2 percent compared to prior year, as favorable results in the International segment were partially offset by unfavorable results in the Retail segment. Segment profit for the Foodservice segment was comparable to the prior year. Net earnings increased 1 percent compared to the prior year, as improved segment profit and favorable interest and investment income were partially offset by a higher effective tax rate. Adjusted net earnings(1) — excluding the impact of costs associated with the Company’s Transform and Modernize (T&M) initiative, litigation settlements, and the gain on the divestiture of Hormel Health Labs, LLC (Hormel Health Labs) — declined 2 percent. Diluted earnings per share and adjusted diluted earnings per share(1) for fiscal 2024 were $1.47 and $1.58, respectively, compared to $1.45 and $1.61 last year.
International segment profit increased significantly compared to prior year due to contribution from the Company’s minority investments, improved mix and favorable costs in the Company's China business, and favorable export product mix. Segment profit for the Foodservice segment was comparable to the prior year as the benefit from higher sales and lower logistics expenses were offset by higher selling, general and administrative (SG&A) expenses. Retail segment profit declined for the full year due to lower sales, lower equity in earnings of affiliates, and higher SG&A expenses. These declines were partially offset by the benefit from lower logistics expenses, savings from the T&M initiative, and the lapping of a non-cash impairment charge associated with the Justin’s® trade name in fiscal 2023.
Fiscal 2024 was an important year of investment for the Company's multi-year T&M initiative. The Company made meaningful progress on the initiative, which is expected to deliver long-term value to the organization.
The Company again reinvested into the business through capital expenditures and returned a record amount of cash to shareholders in the form of dividends. Capital expenditures in fiscal 2024 were $256 million, including investments in capacity expansions for Hormel® Fire Braised® products, Applegate® products and the Jiaxing, China, facility. The Company continues to prioritize investments in growth, innovation, cost savings, automation, and maintenance. Dividends paid to shareholders were a record $615 million.
Fiscal 2025 Outlook(2): The Company continues to navigate through a dynamic consumer and operating environment. Organic net sales(1) growth of 1 percent to 3 percent is expected in fiscal 2025, which assumes benefits from modestly higher volumes, growth in key categories and markets, higher brand support and innovation, market-based pricing actions, and the current assumptions for raw material costs. From a bottom-line perspective, diluted earnings per share are expected to be $1.51 to $1.65 and adjusted diluted earnings per share(1) are expected to be $1.58 to $1.72. Earnings are expected to decline in the first half of the year as growth in key categories and markets is expected to be offset by the recovery from a prior year production disruption at the Company's Suffolk, Virginia, facility, the impact from lower commodity turkey markets, and higher SG&A expenses, including increased brand support through advertising. Segment profit growth from all three segments is expected in the back half of the year. Major risks to the outlook include incremental inflationary pressures and the impact of deteriorating macroeconomic conditions on the Company’s customers, consumers, and operators.
The Company remains in a strong financial position due to its consistent cash flow, liquidity, and solid balance sheet. The Company plans to continue to support the business through increased marketing and advertising investments for its leading brands. Further, continued capital expenditure investments including investments for data and technology related to its T&M initiative and capacity expansions for Hormel® Fire Braised® products, Applegate® products and the Jiaxing, China, facility. The annual dividend for 2025 will be $1.16 per share, representing an increase of 3 percent and marking the 59th consecutive year of dividend increases. Returning cash to shareholders in the form of dividends remains a top priority for the Company.
Consistent with the plan outlined at its 2023 investor day, the Company expects fiscal 2025 to be a year of acceleration in its T&M initiative. For fiscal 2025, the Company expects a benefit to net earnings from its T&M initiative.
A review of the Company’s fiscal 20242025 performance compared to fiscal 20232024 appears in the following section. A review of fiscal 20232024 performance compared to fiscal 20222023 is set forth in Part II, Item 7 of the Company’s Annual Report on Form 10-K for the fiscal year ended October 29,27, 2023,2024, under the caption "Management’s Discussion and Analysis of Financial Condition and Results of Operations," which is incorporated herein by reference.
The Company discloses certain measures not defined by U.S. Generally Accepted Accounting Principles (GAAP), including organic volume, organic net sales, adjusted selling, general and administrative (SG&A), adjusted SG&A as a percent of net sales, adjusted operating income, adjusted net earnings, adjusted diluted earnings per share, and adjusted segment profit. The Company utilizes these non-GAAP measures to understand and evaluate operating performance on a consistent basis. For additional information and reconciliations to the most closely comparable measures calculated in accordance with GAAP, see the "Non-GAAP Measures" section of this Item. All forward-looking comparisons for fiscal 2026 are comparing fiscal 2025 GAAP figures to projected fiscal 2026 GAAP figures, unless otherwise noted.
(1) See the "Non-GAAP Measures" section below for a description of the Company’s use of measures not defined by U.S. generally accepted accounting principles (GAAP).
(2) All forward-looking comparisons for fiscal 2025 are comparing fiscal 2024 GAAP figures to projected fiscal 2025 GAAP figures, unless otherwise noted.
Fiscal 2025: The Company believes fiscal 2025 was a challenging year, as strong net sales performance did not translate into net earnings growth. Net sales totaled $12.1 billion, an increase of 2 percent compared to the prior year. Growth was driven by all three segments, and the Company delivered four consecutive quarters of net sales gains.
In fiscal 2025, the Company experienced persistent input cost inflation, primarily related to commodity markets, which significantly pressured earnings. Pork belly, beef, and nut input costs caused the most earnings pressure during the year.
The Company continued to support its strategic programs during fiscal 2025, including its multi-year Transform and Modernize (T&M) initiative. The Company made meaningful progress on the initiative, which is expected to deliver long-term value to the organization. The Company also recognized expenses associated with a corporate restructuring plan designed to reduce administrative expenses, improve efficiencies, and align its workforce to the Company’s future needs, while enabling continued investment in the Company’s growth.
SG&A decreased in fiscal 2025 primarily due to the lapping of antitrust settlements incurred in the prior year, lower advertising spend, and proceeds from a legal settlement. Adjusted SG&A as a percent of net sales was comparable to the prior year.
Operating income decreased 33 percent compared to the prior year, as earnings were significantly impacted by non-cash impairment charges recorded in the International and Retail segments. Adjusted operating income decreased 11 percent.
Net earnings decreased 41 percent compared to the prior year due to the above factors and a higher effective tax rate primarily driven by impairment charges. Adjusted net earnings declined 13 percent. Diluted earnings per share and adjusted diluted earnings per share for fiscal 2025 were $0.87 and $1.37, respectively, compared to $1.47 and $1.58 in the prior year.
Capital expenditures in fiscal 2025 were $311 million, including investments in capacity expansions for Hormel® Fire Braised™ and Applegate® products, data and technology, people and animal safety, and the Jiaxing, China, facility. The Company continues to prioritize investments in growth, innovation, cost savings, automation, and maintenance.
Dividends paid to shareholders were a record $633 million.
Changes in global trade policies, including tariffs and retaliatory tariffs, had a minor impact on the Company’s results of operations during fiscal 2025. The Company continues to monitor and evaluate the impact of proposed and enacted tariffs, including proposed and enacted retaliatory tariffs, and other trade restrictions, as well as its ability to mitigate their impacts.
Fiscal 2026 Outlook: The Company continues to navigate through a dynamic consumer and operating environment. Organic net sales growth of 1 percent to 4 percent is expected in fiscal 2026, which the Company anticipates being driven by growth across a broad range of categories, increased brand support and innovation, market-based pricing actions, and the Company’s current assumptions for raw material costs. From a bottom-line perspective, segment profit growth from all three segments is expected in fiscal 2026. Diluted earnings per share are expected to be $1.29 to $1.39 and adjusted diluted earnings per share are expected to be $1.43 to $1.51. Earnings are expected to decline in the first quarter of the year, followed by growth in each of the remaining three quarters. Major risks to the outlook include incremental inflationary pressures and the impact of deteriorating macroeconomic conditions on the Company’s customers, consumers, and operators.
The Company remains in a strong financial position due to its operating cash flow, liquidity, and solid balance sheet. The Company plans to continue to support the business through increased marketing and advertising investments for its leading brands. Further, continued capital expenditure investments are expected, including investments in data and technology and value-added capacity expansions.
The implied annualized dividend rate for 2026 is $1.17 per share, representing an increase of 1 percent and marking the 60th consecutive year of dividend increases. Returning cash to shareholders in the form of dividends remains a top priority for the Company.
The Company is a processor of branded and unbranded food products for retail, foodservice, and commercial customers.
The Company reports its results in the following three reportable segments:
The Retail segment consists primarily of the processing, marketing, and sale of food products sold predominantly in the retail market in the United States. This segment also includes the results from the Company’s MegaMex Foods, LLC joint venture.
The Foodservice segment consists primarily of the processing, marketing, and sale of food products for foodservice, convenience store, and commercial customers located in the United States.
The International segment processes, markets, and sells Company products internationally. This segment also includes the results from the Company’s international joint ventures, international equity method investments, and international royalty arrangements.
The Company’s fiscal year consisted of 52 weeks in fiscal years 2024, 2023, and 2022. Fiscal year 2025 will consist of 52 weeks.
Volume, Net Sales, Net Earnings (Loss) and Diluted Earnings (Loss) Per Share
Net sales increased for the fourth quarter and full year of fiscal 2025 while volume declined over both periods.
For the fourth quarter of fiscal 2025, net sales growth across the Retail and Foodservice segments offset declines in the International segment. Net sales growth across the enterprise was driven primarily by the Jennie-O® turkey portfolio, Foodservice customized solutions business, Planters® snack nuts, Applegate® natural and organic meats, and premium prepared proteins, and the SPAM® family of products.
For the full year fiscal 2025, net sales increased in each segment. Net sales growth for the full year was driven primarily by the Jennie-O® turkey portfolio, the SPAM® family of products, Foodservice customized solutions business, Planters® snack nuts, Applegate® natural and organic meats, the bacon portfolio, and the Mexican foods portfolio.
For the fourth quarter of fiscal 2025, volume in the Retail segment was comparable to the prior year and declined in the International segment. For the fourth quarter of fiscal 2025, organic volume increased in the Foodservice segment. For the full year of fiscal 2025, organic volume in the Foodservice segment increased compared to the prior year. Volume declined in the Retail segment and was comparable to the prior year in the International segment for the full year of fiscal 2025.
(1) See the "Non-GAAP Measures" section below for a description of the Company’s use of measures not defined by U.S. GAAP.
Volume and Net Sales
Volume for the fourth quarter and full year of fiscal 2024 declined, as higher volume in the Foodservice segment was more than offset by lower volume in the Retail segment, primarily in the Convenient Meals & Proteins and the Value-Added Meats verticals.
Net sales declined in the fourth quarter of fiscal 2024, as higher net sales in the Foodservice and International segments were more than offset by declines in the Retail segment, driven by significant year-over-year pricing declines for whole bird turkeys and lower sales of Planters® snack nuts resulting from production disruptions at the Suffolk, Virginia, facility.
Full year fiscal 2024 net sales declined compared to the prior year, as the benefit from broad-based growth in the Foodservice segment and value-added growth in the Retail segment from Applegate®, value-added fresh pork, bacon, and value-added turkey, was more than offset by declines in the Retail and International segments. Declines in the Retail segment were driven primarily by significant year-over-year pricing declines for whole bird and commodity turkey and softness in the Convenient Meals & Proteins vertical. International net sales declines were driven by lower commodity exports and lower net sales in China.
In fiscal 2025,2026, the Company expects net sales growth, which assumes benefits from modestly higher volumes, growth inacross keya categoriesbroad andrange markets,of highercategories, increased brand support and innovation, and market-based pricing actions, and the current assumptions for raw material costs.actions. Risks to this outlook include slowing consumer demand and marketcommodity price fluctuations.
Cost of products sold for the fourth quarter and full year of fiscal 20242025 decreasedincreased due to lowerhigher sales.commodity Costinput ofcosts, productsmainly soldfor perpork poundbellies, increased one percent in fiscal 2024, driven primarily by product mix changesbeef, and inflationary pressures, partially offset by cost savings from the Company's T&M initiative.nuts.
In fiscal 2025,2026, the Company expects raw material costs for pork, beef,beef and nuts to remain above historical averages. Pork costs are anticipated to be abovelower historicalthan levels.fiscal Feed2025 costslevels; however, they are expected to beremain lower aselevated compared to thelong-term prioraverages. year.Inflationary Thepressures Companyon is anticipating normalized levels of inflation for employee,employee-related, packaging, and production relatedexpenses expenses.are expected to persist at normalized levels. The Company expects itsCompany’s T&M initiative is projected to delivercontinue delivering cost savings in fiscal 2025,2026, targetingwith thea focus on procurement of ingredients and supplies, logistics,production-related costs, and production costs.logistics.
Gross profit as a percentpercentage of net sales fordecreased in both the fourth quarter and full year of fiscal 20242025 increased,compared as pricing actions and cost savings fromto the Company'sprior T&Myear. initiativeEach weresegment partiallyexperienced offseta bydecline inflationary pressures. Compared to fiscal 2023,in gross profit as a percentpercentage of net sales increasedversus forfiscal 2024. All segments benefited from cost savings generated through the RetailCompany’s andT&M Internationalinitiative, segmentswhich andwere decreasedmore forthan theoffset Foodserviceby segment.inflationary pressures.
SG&A for the fourth quarter of fiscal 2025 decreased due to proceeds from a legal settlement and lower advertising expenses. Adjusted SG&A for the fourth quarter of fiscal 2025 decreased due to lower advertising expenses.
For full year fiscal 2025, SG&A decreased, primarily due to the lapping of antitrust settlements incurred in fiscal 2024, lower advertising spend, and proceeds from a legal settlement recognized in fiscal 2025. These benefits were partially offset by a loss on a non-core sow operation, higher employee-related expenses, and higher external expenses. Adjusted SG&A increased compared to the prior year, as the reduction in advertising spend was more than offset by higher employee-related expenses and higher external expenses.
(1) See the "Non-GAAP Measures" section below for a description of the Company’s use of measures not defined by U.S. GAAP.
SG&A expenses for the fourth quarter of fiscal 2024 increased due to higher employee-related expenses and higher consulting fees related to the Company’s T&M initiative. For full year fiscal 2024, the increase in SG&A expenses and SG&A expenses as a percent of net sales is attributed to higher employee-related expenses, higher consulting fees related to the Company’s T&M initiative, and antitrust settlements, partially offset by the lapping of an unfavorable arbitration ruling in the prior year. Adjusted SG&A expenses as a percent of net sales(1) for fiscal 2024 increased due to employee-related expenses.
Advertising investments in fiscal 20242025 were $163$148 million, representing a 29 percent increasedecrease compared to fiscal 2023.2024.
Research and development continues to be a vital part of the Company’s strategy to grow existing brands and expand into new branded items. Research and development expenses were $36.1 million in fiscal 2024, compared to $33.7 million in fiscal 2023.
Equity in earnings of affiliates decreased for the fourth quarter and full year of fiscal 2025 as growth for MegaMex Foods was more than offset by a $164 million non-cash impairment charge related to a minority investment in Indonesia.
Equity in earnings of affiliates increased for the fourth quarter and full year of fiscal 2024 as growth in the International segment's minority interests in Indonesia and the Philippines and the lapping of an impairment of a corporate venturing investment in the prior year were partially offset by weaker results for MegaMex Foods.
The Company accounts for its majority-owned operations under the consolidation method. Investments in which the Company owns a minority interest, and for which there are no other indicators of control, are accounted for under the equity or cost method. These investments, including balances due to or from affiliates, are included on the Consolidated Statements of Financial Position as Investments in Affiliates. The composition of this line item as of October 27, 2024, was as follows:
During the fourth quarter of fiscal 2025, the Company recognized $71 million of intangible asset impairments related to the Planters® trade name, a private label customer relationship, and the Chi-Chi's® trade name, all recorded within the Retail segment.
An impairment charge related to the Justin’s® trade name of $28.4 million was recorded in the fourth quarter of fiscal 2023.
Interest Income, Interest Expense, and InvestmentOther Income and(Expense), Interest ExpenseNet
Interest income declined in both the fourth quarter and full year of fiscal 2025, primarily as a result of lower average cash balances. Interest expense was comparable during the fourth quarter and decreased for the full year of fiscal 2025. Other expense increased in the fourth quarter of fiscal 2025, primarily due to costs related to the Company's recently announced corporate restructuring plan. For the full year of fiscal 2025, other expense increased due to one-time costs related to the corporate restructuring plan and lower rabbi performance, which were partially offset by lower on-going pension costs.
Interest and investment income increased in the fourth quarter of fiscal 2024 primarily due to favorable rabbi trust performance. Interest and investment income increased for the full year of fiscal 2024 due to favorable rabbi trust performance as well as higher cash balances and interest rates. Interest expense increased in fiscal 2024 due to higher interest rates on debt issued during the year.
The effective tax rate for fiscal 2025 reflected a detriment related to the non-cash impairment charges on a minority investment recorded in the fourth quarter. The fiscal 2024 effective tax rate included a benefit from the purchase of federal energy tax credits. The fiscal 2023 effective tax rate included a benefit related to the deduction for foreign-derived intangible income that did not repeat in fiscal 2024. For additional information, refer to Note NO - Income Taxes of the Notes to the Consolidated Financial Statements.
What changed in the latest 10-Q
Risk Factors
The Company’s business, operations, and financial condition are subject to various risks and uncertainties. There have been no material changes to the risk factors previously disclosed in Part I, Item 1A. Risk Factors in the Company’s Annual Report on Form 10-K for the fiscal year ended October 26, 2025.
No wording changes found in this section.
Full comparison: every changed paragraph (0)
Management's Discussion & Analysis (MD&A)
New heading “Adjusted Segment Profit (Non-GAAP)”
Largest changes
“(1) International segment profit (loss) adjustments in the first nine months of fiscal 2026 were due to a non-cash impairment charge. Net Unallocated Expense adjustments were comprised of gain (loss) on divestitures, nonrecurring T&M initiative costs, an unfavorable litigation settlement, corporate restructuring plan charges, and Consulting Agreement costs.”see in full comparison
“(1) International segment profit (loss) adjustments in the third quarter of fiscal 2026 were due to a non-cash impairment charge. Net Unallocated Expense adjustments were comprised of gain (loss) on divestitures, an unfavorable litigation settlement, nonrecurring T&M initiative costs, and corporate restructuring plan charges.”see in full comparison
In thesee in full comparisonfourththird quarter of fiscal2025,2026, the Companycommencedrecorded acorporatenon-cashrestructuringimpairmentplan,chargethe focus of which isrelated toreduceaadministrative expenses, improve efficiencies, and align the workforce to the Company’s future needs, while enabling continuedminority investment inthe Company’s growth. The costs incurred to execute the corporate restructuring plan and the charges incurred under the program are primarily related to severance and employee benefit costs. Because the Company believes certain charges incurred under the corporate restructuring plan do not reflect future operating costs and are not meaningful when comparing the Company's operating performance against that of prior periods, the Company adjusts for (i.e., excludes) these impacts.Indonesia. See NoteRD -RestructuringInvestments in Affiliates of the Notes to the Consolidated Financial Statements for additional information. The Company believes these charges are not indicative of the Company’s core operating performance, do not reflect expected future operating income or costs, and are not meaningful when comparing the Company’s operating performance against that of prior periods. Thus, the Company has adjusted for (i.e., excluded) these impacts.
•Earnings before income taxes decreased 56 percent for thesee in full comparisonsecondthird quarter of fiscal20262026,decreasedprimarily11duepercent,towhichawas negatively impacted by the $61$56 million lossonrelated to thesaleBrazil divestiture, a $48 million non-cash impairment charge, and a litigation settlement ofthe$38whole-bird turkey business.million. Adjusted earnings before income taxes increased143 percent, ashigherlowernet sales and improved performance across the turkey manufacturing networkSG&A were partially offset by lower net sales and higher logistics expenses.
“•The pre-tax impact of nonrecurring expenses and discrete items in the third quarter of fiscal 2026 was $155 million, including a loss related to the Brazil divestiture, a non-cash impairment of a minority investment in Indonesia, a litigation settlement, and the Company’s Transform and Modernize (T&M) initiative.”see in full comparison
In the third quarter of fiscal 2026, the Company executed a settlement agreement with certain plaintiffs in an antitrust lawsuit. See Note K - Commitments and Contingencies of the Notes to the Consolidated Financial Statements included in this filing for additional information. In fiscal 2025, the Company entered into a settlement agreement with certain plaintiffs in an antitrust lawsuit. See Note K - Commitments and Contingencies of the Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended October 26, 2025, for additional information.see in full comparison
Full comparison: every changed paragraph (77)
The Company is a global manufacturer and marketer of branded food products and remains focused on driving long-term growth through a balanced business model, a diverse portfolio, and a commitment to creating value for all stakeholders. The Company’s three reportable segments, Retail, Foodservice, and International, are described in Note QO - Segment Reporting in the Notes to the Consolidated Financial Statements in this Quarterly Report on Form 10-Q.
The Company discloses certain measures not defined by United States (U.S.) Generally Accepted Accounting Principles (GAAP), including organic volume, organic net sales, adjusted cost of products sold, adjusted selling, general and administrative (SG&A), adjusted SG&A as a percent of net sales, adjusted equity in earnings of affiliates, adjusted operating income, adjusted earnings before income taxes, andadjusted provision for income taxes, adjusted net earnings attributable to Hormel Foods Corporation, adjusted diluted earnings per share.share, and adjusted segment profit. The Company utilizes these non-GAAP measures to understand and evaluate operating performance on a consistent basis. For additional information and reconciliations to the most closely comparable measures calculated in accordance with GAAP, see the "Non-GAAP Measures" section of this Item.
Diluted earnings per share was $0.29$0.11 for the secondthird quarter of fiscal 2026, down 1267 percent compared to the same period last year. Adjusted diluted earnings per share for the secondthird quarter of fiscal 2026 was $0.40,$0.37, up 146 percent compared to the same period last year. Significant factors impacting the quarter are listed below. All comparisons are to the same period of the prior year unless otherwise noted.
•Net sales for the secondthird quarter of fiscal 2026 increaseddecreased 32 percent. Organic net sales increaseddecreased 32 percent with growth acrossfrom the Foodservice,Foodservice International,segment offset by declines in the Retail and RetailInternational segments.
•Total segment profit for the secondthird quarter of fiscal 2026 increaseddecreased 1317 percent.percent, Segmentwhile adjusted segment profit increasedwas flat to the prior year, as growth in the Retail,Foodservice Foodservice,segment andwas offset by declines in the Retail segment. Adjusted segment profit in the International segments.segment was comparable to the prior year.
◦The increasedecrease in Retail segment profit was due to higherlower net sales, improved performance across the turkey manufacturing network,sales and lowerhigher SG&A.logistics Theseexpenses, benefitswhich were partially offset by inflationarylower pressures in the logistics network.SG&A.
◦The increase in Foodservice segment profit was driven primarily by higher sales and improved margins, which were partially offset by higher logistics expenses and higher SG&A.
◦The increase in Foodservice segment profit was driven primarily by net sales performance, which benefited from market-based pricing actions and modest volume growth. Segment profit also benefited from improved performance across the turkey manufacturing network.
◦The increasedecrease in International segment profit was primarilysignificantly dueimpacted toby strongthe exportnon-cash performanceimpairment andof growtha minority investment in China.Indonesia.
•Earnings before income taxes decreased 56 percent for the secondthird quarter of fiscal 20262026, decreasedprimarily 11due percent,to whicha was negatively impacted by the $61$56 million loss onrelated to the saleBrazil divestiture, a $48 million non-cash impairment charge, and a litigation settlement of the$38 whole-bird turkey business.million. Adjusted earnings before income taxes increased 143 percent, as higherlower net sales and improved performance across the turkey manufacturing networkSG&A were partially offset by lower net sales and higher logistics expenses.
•The pre-tax impact of nonrecurring expenses and discrete items in the third quarter of fiscal 2026 was $155 million, including a loss related to the Brazil divestiture, a non-cash impairment of a minority investment in Indonesia, a litigation settlement, and the Company’s Transform and Modernize (T&M) initiative.
•The pre-tax impact of non-recurring expenses related to the loss on the sale of the whole-bird turkey business and the Company’s Transform and Modernize (T&M) initiative in the second quarter of fiscal 2026 were $77 million, which was primarily recorded in SG&A.
Cash flow from operations was $528$769 million for the first sixnine months of fiscal 2026, a 4447 percent increase primarily duereflecting to the impact of animproved inventory buildmanagement inand theworking secondcapital quarter of fiscal 2025.performance.
Entering the secondfourth halfquarter of fiscal 2026, the external environment remains dynamic, with continued volatility associated with macroeconomic and geopolitical conditions. The Company is actively working to mitigate the impact of these conditions. However, continued pressure from the external environment, at a level greater than expected, could have an adverse impact on results of operations.
Volume and net sales decreased for the third quarter of fiscal 2026, while volume decreased and net sales increased for the first nine months of fiscal 2026.
Net Sales increased and volume decreased for the second quarter and first six months of fiscal 2026 compared to the prior year.
For the second quarter of fiscal 2026, each segment contributed to organic net sales growth. Strong enterprise performance across the turkey portfolio, Foodservice customized solutions business, contract manufacturing, the pepperoni portfolio, and Applegate® products were key drivers of organic net sales growth.
For the secondthird quarter of fiscal 2026, organicnet volumesales increased marginally in the International and Foodservice segmentssegment, andwhile net sales declined in the Retail segment,and primarilyInternational segments. The enterprise organic net sales decline was driven by weaker performance in commodity turkey, the bacon portfolio, and the strategic exit from select non-core private label snack nutnuts items.items, which more than offset strong growth in premium prepared proteins, the Jennie-O® turkey portfolio, contract manufacturing, and pizza toppings.
For the third quarter of fiscal 2026, volume decreased for all three segments, primarily driven by the commodity turkey portfolio.
For the first sixnine months of fiscal 2026, net sales growth in the Foodservice and International segments offset declines in the Retail segment. Strong enterprise performance across the Jennie-O® turkey portfolio, premium prepared proteins, and the Foodservice customized solutions business, premium prepared proteins, the pepperoni portfolio, and contract manufacturingbusiness were key drivers of organic net sales growth. For the first sixnine months of fiscal 2026, volume grew in the Foodservice and International segments and declined in all three segments, driven primarily by the Retailcommodity segment.turkey portfolio and the strategic exit from select non-core private label snack nut items.
Cost of products sold increaseddecreased for the secondthird quarter and first six months of fiscal 2026. HigherLower commodityvolume and favorable pork input costs were partially offset by higher beef input costs and higher logistics expenses were partially offset by improved performance in the turkey manufacturing network.expenses.
Cost of products sold increased for the first nine months of fiscal 2026, as lower volume, higher beef input costs, and higher logistics expenses were partially offset by favorable pork input costs.
On a per pound basis, cost of products sold increased for both the secondthird quarter and first sixnine months of fiscal 2026 increased compared to the prior year.
For the third quarter of fiscal 2026, gross profit as a percent of net sales decreased. For the first nine months of fiscal 2026, gross profit as a percent of net sales increased.
For the second quarter and first six months of fiscal 2026, gross profit as a percent of net sales increased. Gross profit as a percent of net sales increased for the Retail,Foodservice Foodservice,segment and decreased for the Retail and International segments in the third quarter and first nine months of fiscal 2026 compared to the prior year.
For the secondthird quarter of fiscal 2026, SG&A and SG&A as a percent of net sales increased, driven primarily by thea loss onrelated to the saleBrazil ofdivestiture theand whole-birda turkeylitigation business.settlement. Adjusted SG&A increased,and driven primarily by increased expenses related to legal matters. Adjustedadjusted SG&A as a percent of net sales wasdecreased, flatdriven toprimarily theby priorlower year.employee-related expenses and a reduction in marketing and advertising.
For the first sixnine months of fiscal 2026, SG&A and SG&A as a percent of net sales increased, duedriven toprimarily by the loss on the sale of the whole-bird turkey business, a loss related to the Brazil divestiture, and a litigation settlement, which were partially offset by the gain on the sale of Justin's, LLC and lapping the loss on the sale of a non-core sow operation.LLC. Adjusted SG&A increased,and driven primarily by increased expenses related to legal matters. Adjustedadjusted SG&A as a percent of net sales wasdecreased, comparabledriven toprimarily theby priora year.reduction in marketing and advertising.
Advertising investments in the secondthird quarter of fiscal 2026 were $34 million, a decrease of 718 percent compared to the prior year. Advertising investments in the first six months of fiscal 2026 were $75 million, down 6 percent compared to the prior year. The declines wereyear, partially due to the timing of advertising campaigns. Advertising investments in the first nine months of fiscal 2026 were $108 million, down 10 percent compared to the prior year. In fiscal 2026, the Company intendsexpects advertising investments to increasebe advertisingcomparable expenseto the prior year, as it continues to invest insupport its priority brands.
Equity in earnings of affiliates for the secondthird quarter and first sixnine months of fiscal 2026 increaseddecreased, primarily driven by thea results$48 ofmillion MegaMexnon-cash Foods,impairment LLC.charge related to a minority investment in Indonesia.
Interest income increased in the secondthird quarter and the first nine months of fiscal 2026, as higher average cash balances more than offset the impact of declining interest rates. For the third quarter and the first sixnine months of fiscal 2026, interest incomeexpense decreased,was asmarginally lowerhigher interestcompared rates more than offsetto the benefitprior of modestly higher cash balances.year. Other income increaseddecreased in the secondthird quarter andof fiscal 2026, primarily due to the performance of the rabbi trust. For the first sixnine months of fiscal 2026, other income increased primarily drivendue byto thelower investmentpension gains within the rabbi trust.costs.
The effective tax rate in the secondthird quarter of fiscal 2026 was 23.6%42.3% compared to 22.0%22.3% for the same period in the prior year, primarily due to the impact of the whole-birdBrazil turkeydivestiture transactionand the non-cash impairment charge related to a minority investment in the second quarter of fiscal 2026.Indonesia. For additional information, refer to Note OM - Income Taxes of the Notes to the Consolidated Financial Statements.
The effective tax rate for fiscal 2026 is expected to be between 21.5 and 22.5 percent.
Net sales and segment profit for each of the Company’s reportable segments are set forth below. TheIntersegment Companysales doesare excluded from the reported results and are not allocateconsidered in management's assessment of segment performance. Segment profit excludes unallocated general corporate expenses, deferred compensation, non-recurringnonrecurring expenses associated with the T&MTransform and Modernize initiative, corporate restructuring plan costs, gains orand losses on the sale of businesses,divestitures, and interest and other income and expense to its segments when measuring performance. The Company also retains various other income and expenses at the corporate level.expense. Equity in earningsEarnings of affiliatesAffiliates is included in segment profit; however, earnings attributable to the Company’s corporate venturing investments and noncontrolling interests are excluded. These excluded items are includedpresented below as Net Unallocated Expense and Noncontrolling Interest whenin reconcilingthe reconciliation to Earnings Before Income Taxes.
Organic net sales decreased in the third quarter of fiscal 2026, as declines in commodity turkey and private label snack nuts were partially offset by strong performance in value-added turkey offerings, contract manufacturing, and Planters® snack nuts.
Additional priority brands that delivered solid growth during the quarter included the SPAM® family of products, Applegate® natural and organic meats, and Hormel® chili. For the first nine months of fiscal 2026, organic net sales declined, as strong performance in Jennie-O® ground turkey was primarily offset by the strategic exit from select non-core private label snack nut items.
Retail segment profit decreased in the third quarter and first nine months of fiscal 2026, as lower net sales and higher logistics expenses were partially offset by lower SG&A.
Organic net sales grew in the second quarter of fiscal 2026, as strong performance in Jennie-O® ground turkey was partially offset by the strategic exit from select non-core private label snack nut items. Other priority brands such as Applegate® natural and organic meats, Hormel® Black Label® bacon, the Herdez® portfolio, and Hormel Gatherings® party trays contributed to net sales growth in the quarter. For the first six months of fiscal 2026, organic net sales was comparable to prior year, as strong performance in Jennie-O® ground turkey was offset by the strategic exit from select non-core private label snack nut items.
Retail segment profit increased in the second quarter of fiscal 2026 as higher net sales, improved performance across the turkey manufacturing network, and lower SG&A were partially offset by inflationary pressures in the logistics network. Segment profit decreased in the first six months of fiscal 2026 due to lower sales and higher logistics expenses which were partially offset by improved performance across the turkey manufacturing network and favorable SG&A.
Organic net sales growth in the Foodservice segment was broad-based in the secondthird quarter and first sixnine months of fiscal 2026. Organic volume also increaseddecreased in boththe periods.third quarter and was comparable in the first nine months. Net sales growth for the secondthird quarter was primarily driven by premium prepared proteins, branded pepperoni, and Jennie-O® turkey. Net sales growth for the first sixnine months of fiscal 2026 was primarily driven by premium prepared proteins, the customized solutions business, branded pepperoni, and premiumJennie-O® prepared proteins.turkey. For the first sixnine months of fiscal 2026, notable branded products, including Austin Blues® smoked meats, Hormel® Natural Choice® meats, and Fontanini® Italian meats, and Jennie-O® turkey,meats delivered strong net sales results.
Segment profit increased for the third quarter and first nine months of fiscal 2026, as higher net sales and favorable pork input costs were partially offset by higher logistics and SG&A.
Segment profit increased for the second quarter and first six months of fiscal 2026, primarily driven by net sales performance, which benefited from market-based pricing actions and modest volume growth, despite a challenging operating environment. Segment profit also benefited from improved performance across the turkey manufacturing network.
The Foodservice segment continued to benefit from an extensive range of solutions-based products, its direct-selling organization, and a diverse channel presence during the secondthird quarter and first sixnine months of fiscal 2026.
For the International segment, organic volume and organic net sales declined in the third quarter of fiscal 2026 as the recognition of certain SPAM® export sales was adversely impacted due to a legal-entity transition. In the first nine months of fiscal 2026, organic volume declined and organic net sales grew. Organic net sales growth was driven by strong performance in multinational businesses, partially offset by the recognition of certain SPAM® export sales which was adversely impacted due to a legal-entity transition.
Segment profit for the third quarter and first nine months of fiscal 2026 was significantly impacted by the non-cash impairment of a minority investment in Indonesia. Adjusted segment profit in the third quarter of fiscal 2026 was comparable to the prior year, as minority investment results were offset by performance in Brazil. Adjusted segment profit grew in the first nine months of fiscal 2026, primarily due to growth in China and minority investment performance.
For the International segment, organic volume and organic net sales grew in the second quarter and first six months of fiscal 2026. Organic net sales growth was driven by strong results from SPAM® luncheon meat exports and the China business.
International segment profit increased in the second quarter and the first six months of fiscal 2026, primarily due to strong export performance and growth in China.
For the third quarter of fiscal 2026, net unallocated expense increased primarily due to a loss related to the Brazil divestiture and a litigation settlement.
For the secondfirst quarternine months of fiscal 2026, net unallocated expense increased primarily due to the loss on the sale of the whole-bird turkey business.business, Fora loss related to the firstBrazil sixdivestiture, monthsa oflitigation fiscal 2026, net unallocated expense increased as the loss on the sale of the whole-bird turkey business,settlement, expenses associated with the corporate restructuring plan, and expenses for a consulting agreement with a former executive (Consulting Agreement). These expenses were partially offset by the gain on the sale of the controlling equity interest in Justin’s, LLC and lapping the loss on the sale of a non-core sow operation in fiscal 2025.
In the fourth quarter of fiscal 2023, the Company announced a multi-year T&M initiative. In presenting non-GAAP measures, the Company adjusts for (i.e., excludes) expenses for this initiative that are non-recurring,nonrecurring, which are primarily project-based external consulting fees and expenses related to supply chain and portfolio optimization (e.g., asset write-offs, severance, or relocation-related costs). The Company believes that non-recurringnonrecurring costs associated with the T&M initiative are not reflective of the Company’s ongoing operating cost structure; therefore, the Company is excluding these discrete costs. The Company does not adjust for (i.e., does not exclude) certain costs related to the T&M initiative that are expected to continue after the project ends, such as software license fees and internal employee expenses, because those costs are considered ongoing in nature as a component of normal operating costs. The Company also does not adjust for savings realized through the T&M initiative as these are considered ongoing in nature and reflective of expected future operating performance.
Gain or Loss on Sale of BusinessDivestitures
InAs the second quarterpart of fiscalits 2026,ongoing portfolio management activities, the Company completedmay theperiodically saledivest ofcertain businesses to better align its whole-birdportfolio turkey business, resulting in a loss on the sale. In the first quarter of fiscal 2026, the Company sold 51% ofwith its equitystrategic interestobjectives inand Justin's,long-term LLC,growth resulting in a gain on the sale. In the first quarter of fiscal 2025, the Company sold Mountain Prairie, LLC, a non-core sow operation, resulting in a loss on the sale.strategy. The Company believes the one-time impacts from these salestransactions, including transaction costs, are not reflective of the Company’s ongoing operating cost structure, are not indicative of the Company’s core operating performance, and are not meaningful when comparing the Company’s operating performance against that of prior periods. Thus, the Company has adjusted for (i.e., excluded) these impacts. Transactions affecting comparability include the Brazil transaction, the whole-bird turkey transaction, the Justin's, LLC transaction, and the Mountain Prairie, LLC divestiture. See Note B - Acquisitions and Divestitures of the Notes to the Consolidated Financial Statements for additional information.
In the fourth quarter of fiscal 2025, the Company commenced a corporate restructuring plan, the focus of which is to reduce administrative expenses, improve efficiencies, and align the workforce to the Company’s future needs, while enabling continued investment in the Company’s growth. The costs incurred to execute the corporate restructuring plan and the charges incurred under the program are primarily related to severance and employee benefit costs. Because the Company believes certain charges incurred under the corporate restructuring plan do not reflect future operating costs and are not meaningful when comparing the Company's operating performance against that of prior periods, the Company adjusts for (i.e., excludes) these impacts. See Note P - Restructuring of the Notes to the Consolidated Financial Statements for additional information.
On October 27, 2025, the Company entered into the Consulting Agreement with its former Chief Executive Officer (CEO), pursuant to which the former CEO is expected to provide consulting services to the Company until April 2027. Consulting costs related to the Consulting Agreement include cash and share-based compensation, which were primarily recognized in the first quarter of fiscal 2026. The Company believes nonrecurring costs associated with the Consulting Agreement are not reflective of the Company’s ongoing operating cost structure, are not indicative of the Company’s core operating performance, and are not meaningful when comparing the Company’s operating performance against that of prior periods; therefore, the Company is excluding these discrete costs.
In the third quarter of fiscal 2026, the Company executed a settlement agreement with certain plaintiffs in an antitrust lawsuit. See Note K - Commitments and Contingencies of the Notes to the Consolidated Financial Statements included in this filing for additional information. In fiscal 2025, the Company entered into a settlement agreement with certain plaintiffs in an antitrust lawsuit. See Note K - Commitments and Contingencies of the Notes to the Consolidated Financial Statements included in the Company’s Annual Report on Form 10-K for the fiscal year ended October 26, 2025, for additional information.
In the fourththird quarter of fiscal 2025,2026, the Company commencedrecorded a corporatenon-cash restructuringimpairment plan,charge the focus of which isrelated to reducea administrative expenses, improve efficiencies, and align the workforce to the Company’s future needs, while enabling continuedminority investment in the Company’s growth. The costs incurred to execute the corporate restructuring plan and the charges incurred under the program are primarily related to severance and employee benefit costs. Because the Company believes certain charges incurred under the corporate restructuring plan do not reflect future operating costs and are not meaningful when comparing the Company's operating performance against that of prior periods, the Company adjusts for (i.e., excludes) these impacts.Indonesia. See Note RD - RestructuringInvestments in Affiliates of the Notes to the Consolidated Financial Statements for additional information. The Company believes these charges are not indicative of the Company’s core operating performance, do not reflect expected future operating income or costs, and are not meaningful when comparing the Company’s operating performance against that of prior periods. Thus, the Company has adjusted for (i.e., excluded) these impacts.
On October 27, 2025, the Company entered into an agreement with its former Chief Executive Officer (CEO), pursuant to which the former CEO is expected to provide consulting services to the Company until April 2027. Consulting costs related to the agreement include cash and share-based compensation, which were primarily recognized in the first quarter of fiscal 2026. The Company believes non-recurring costs associated with the Consulting Agreement are not reflective of the Company’s ongoing operating cost structure, are not indicative of the Company’s core operating performance, and are not meaningful when comparing the Company’s operating performance against that of prior periods; therefore, the Company is excluding these discrete costs.
(1) Comprised primarily of asset write-offs and severancecosts related to supply chain and portfolio optimization.
Adjusted Segment Profit (Non-GAAP)
(1) International segment profit (loss) adjustments in the third quarter of fiscal 2026 were due to a non-cash impairment charge. Net Unallocated Expense adjustments were comprised of gain (loss) on divestitures, an unfavorable litigation settlement, nonrecurring T&M initiative costs, and corporate restructuring plan charges.
(2) Net Unallocated Expense adjustments in the third quarter of fiscal 2025 were comprised of nonrecurring T&M initiative costs.
HRL insider buying and selling (Form 4)
Since 2026-04-11, insiders reported open-market purchases in 1 Form 4 filing (1 insider, 1 trade date, 10,000 shares, about $201.0K) and open-market sales in 1 filing (1 insider, 1 trade date, 20,200 shares, about $495.1K). Net open-market shares: -10,200 (purchases minus sales); net value about -$294.1K.Totals add up every open-market (code P and S) line in those filings, using the prices reported in the filings. Awards, option exercises, tax withholding and gifts are listed below but not counted.
| Trade date | Insider | Transaction | Shares | Price | Value |
|---|---|---|---|---|---|
| 2026-10-05 | Newlands William A |
Open-market purchase | 10,000 | $20.10 | $201.0K |
| 2026-10-03 | Myers Kevin L |
Shares withheld for tax | 864 | $20.25 | $17.5K |
| 2026-09-30 | Policinski Christopher J. |
Grant/award | 2,830 | $19.94 | $56.4K |
| 2026-09-30 | Schoneman Debbra L. |
Grant/award | 1,514 | $19.94 | $30.2K |
| 2026-09-30 | White Steven Andrew |
Grant/award | 3,028 | $19.94 | $60.4K |
| 2026-09-30 | Newlands William A |
Grant/award | 7,635 | $19.94 | $152.3K |
| 2026-09-30 | Bhojwani Gary C. |
Grant/award | 3,028 | $19.94 | $60.4K |
| 2026-07-08 | Bhojwani Gary C. |
Open-market sale | 20,200 | $24.51 | $495.1K |
| 2026-06-09 | Bonifant William W. |
Grant/award | 5,734 | — | — |
| 2026-06-09 | Borrelli Domenic |
Grant/award | 8,341 | — | — |
| 2026-04-27 | Aakre D Scott |
Shares withheld for tax | 1,722 | $21.47 | $37.0K |
| 2026-04-14 | Bonifant William W. |
Grant/award | 12,043 | — | — |
Well-known investors holding HRL (13F)
| Investor | Quarter | Shares | Reported value | % of their 13F | Change vs prior quarter |
|---|---|---|---|---|---|
| Two Sigma Investments | 2026-06-30 | 12,325,712 | $305.9M | 0.23% | Added 3% |
| Point72 Asset Management (Steve Cohen) | 2026-06-30 | 2,391,217 | $54.2M | — | Sold out |
| Gates Foundation Trust | 2026-06-30 | 2,085,290 | $51.8M | 0.15% | No change |
| Millennium Management (Israel Englander) | 2026-06-30 | 1,371,268 | $34.0M | 0.02% | Reduced 51% |
| AQR Capital Management (Cliff Asness) | 2026-06-30 | 1,045,445 | $25.9M | 0.01% | Added 1% |
| Citadel Advisors (Ken Griffin) | 2026-06-30 | 911,774 | $22.6M | 0.01% | Reduced 79% |
| Gotham Asset Management (Joel Greenblatt) | 2026-06-30 | 810,377 | $20.1M | 0.05% | Added 29% |
| D. E. Shaw & Co. | 2026-06-30 | 492,214 | $12.2M | 0.01% | Added 19% |
| Bridgewater Associates | 2026-06-30 | 42,159 | $1.0M | 0.0% | Added 153% |
| Gardner Russo & Quinn (Tom Russo) | 2026-06-30 | 18,500 | $459.2K | 0.01% | Reduced 3% |