HORMEL FOODS CORP /DE/ Q1 FY2025 earnings call

• Retail: Focus on flagship and rising brands; Spam's marketing campaign, Applegate's innovation, Planters' recovery.
• Food Service: Acknowledge Mark Weber's retirement, introduce David Weber; strong performance in premium categories.
• International: Branded exports and China snacking strategy; progress on Transform and Modernize initiative.
• Financials: Net sales $3B, organic +1%; gross margin 15.9%; adjusted EPS $0.35; operating cash flow $309M; dividend increased.

Retail: Organic net sales grew 1%. Key brands like Spam, Applegate, Hormel Black Label Bacon, Jennie-O performed well, with Planters showing sequential recovery. Value-added portfolio exceeded expectations. Food Service: Led top-line growth in premium categories. Mark Weber is retiring, David Weber to succeed him. International: Spam and Skippy excelled in branded exports. China snacking strategy advanced with barbecue bites. Expected growth in fiscal 2025.

Second quarter: Retail net sales comparable to prior year, foodservice mid-single-digit organic growth, international high single-digit growth. Full year: Reaffirm organic net sales growth 1%-3% and adjusted diluted EPS $1.58-$1.72. Second half to benefit from Planters recovery, Transform and Modernize, and value-added portfolio growth.

Turkey supply chain issues due to bird diseases; commodity input cost pressures (pork, beef, nuts); lower investment income.

Q: Elaborate on EPS cadence and confidence in back half growth A: Jim Snee discusses value-added business strength, Planters recovery, and Transform and Modernize Q: CEO search process A: Search committee considering internal and external candidates, Jim will stay until transition Q: Turkey supply chain pressures A: Jim and John Ghingo discuss strategic pricing actions and consumer demand for turkey products Q: EBIT growth implication of Transform and Modernize A: Jim Snee mentions Transform and Modernize creating growth flywheel Q: Margins and segment dynamics A: Jacinth Smiley and John Ghingo discuss margin pressures, retail portfolio strength, and Planters recovery