Investment Thesis
Hormel demonstrates solid financial stability with strong liquidity (2.66x current ratio), healthy debt management (0.36x D/E), and consistent cash generation (280.2M FCF). However, profitability is stagnant with minimal net income growth (0.1% YoY) and declining EPS (-40.8% YoY), indicating margin compression and potential operational challenges despite flat revenue growth.
HRL Strengths
- Excellent liquidity position with 2.66x current ratio and 867.9M cash reserves
- Conservative leverage at 0.36x debt-to-equity with 6.1x interest coverage ratio
- Solid free cash flow generation of 280.2M representing 9.3% FCF margin
- Stable balance sheet with 7.9B equity and manageable 2.9B long-term debt
HRL Risks
- Significant EPS decline of 40.8% YoY despite stable net income indicates share dilution or unfavorable income distribution
- Stagnant profitability with minimal net income growth (0.1% YoY) and flat operating margins at 8.0%
- Weak returns on capital with ROE of 2.3% and ROA of 1.4% suggesting inefficient asset utilization
- Low net margin of 6.0% in competitive food processing industry limits pricing power
- Muted revenue growth of 1.6% YoY signals limited top-line momentum in mature market
Key Metrics to Watch
- Gross margin trends - monitor for cost inflation pressures in commodity meat inputs
- Operating cash flow sustainability and FCF conversion quality
- Debt levels and interest coverage as economic conditions evolve
- EPS trajectory and share count changes
- Operating margin expansion potential and overhead cost management
HRL Financial Metrics
HRL Profitability Ratios
HRL Balance Sheet & Liquidity
HRL 5-Year Financial Trend
5-Year Trend Summary: HORMEL FOODS CORP /DE/'s revenue has shown modest growth of 6% over the 5-year period. The most recent EPS of $1.45 reflects profitable operations.
HRL Growth Metrics (YoY)
HRL Quarterly Performance
| Quarter | Revenue | Net Income | EPS |
|---|---|---|---|
| Q1 2026 | $3.0B | $170.6M | $0.31 |
| Q3 2025 | $2.9B | $176.7M | $0.32 |
| Q2 2025 | $2.9B | $180.0M | $0.33 |
| Q1 2025 | $3.0B | $170.6M | $0.31 |
| Q3 2024 | $2.9B | $162.7M | $0.30 |
| Q2 2024 | $2.9B | $189.3M | $0.34 |
| Q1 2024 | $3.0B | $217.7M | $0.40 |
| Q3 2023 | $3.0B | $162.7M | $0.30 |
Data sourced from SEC EDGAR 10-Q quarterly filings. Figures may represent quarterly or cumulative values.
HRL Capital Allocation
HRL SEC Filings
Access official SEC EDGAR filings for HORMEL FOODS CORP /DE/ (CIK: 0000048465)