Hormel Foods (NYSE:HRL) reported solid organic net sales growth of 1% in Q2 FY2025, in line with expectations, with performance driven by flagship brands, international momentum, and foodservice resilience. Despite headwinds from higher commodity input costs and macroeconomic pressures, the company maintained gross margins at 16.7% and posted adjusted diluted EPS of $0.35.

Strong consumption gains in brands like Applegate, Jennie-O, and Planters, along with foodservice strength and export-driven growth in China, are expected to fuel stronger performance in the second half. Hormel reaffirmed its full-year net sales growth outlook of 2%–3% and narrowed EPS guidance to $1.58–$1.68.

The company emphasized its ongoing commitment to technology and operational transformation through its multi-year Transform and Modernize (T&M) initiative.

Hormel is actively modernizing its supply chain, closing underperforming facilities, opening new logistics centers, and investing in data and analytics infrastructure to support better inventory and capacity planning. With $275–$300 million earmarked for capital expenditures in FY2025, a significant portion is being funneled into tech upgrades, infrastructure, and automation, reinforcing Hormel’s focus on building a future-fit operation.

Why It Matters: Hormel’s T&M initiative offers a blueprint for traditional manufacturers navigating digital transformation. With over 66 projects executed in Q2 alone under the initiative, Hormel is demonstrating how a legacy food company can embrace end-to-end operational upgrades, from supply chain digitization to demand-driven planning, without losing consumer focus. For CIOs and technology leaders, Hormel’s disciplined shift toward efficiency, visibility, and flexibility through analytics and infrastructure investment provides valuable insight into tech-enabled margin resilience and customer responsiveness.

• End-to-End Digital Supply Chain Transformation Is Underway: Hormel continued reengineering its supply network by closing a California production facility and ramping up a tech-enabled distribution center in the Memphis metro area. This new hub leverages automation and logistics software to optimize fulfillment and respond to customer demand in real time. CFO Jacinth Smiley noted this upgrade “enhances our ability to serve customers more effectively,” directly aligning with the company’s long-term infrastructure goals.

• Advanced Analytics Power Inventory and Production Planning: The company is embedding advanced analytics into its supply and demand planning systems, driving a shift from reactive inventory management to predictive, data-driven decision-making. Smiley emphasized this investment is “ensuring we have the right supply and our team is producing the right amount… in the most efficient and effective way to get it to them on time.” This capability is key to meeting seasonal demand and mitigating commodity volatility.

• Digital Tools Support Agile Execution of T&M Projects: Hormel executed 66 discrete T&M projects in Q2 alone, many involving tech integrations across logistics, procurement, and operations. The initiative follows an agile model, with technology enabling rapid pivoting when savings opportunities change. “We have a very robust pipeline of projects,” said Smiley, highlighting the role of digital infrastructure in enabling scalable transformation across the enterprise.

• Marketing Technology Scales Customer Engagement Across Flagship Brands: Hormel is expanding its use of digital advertising and marketing analytics to support flagship brands including Planters, Applegate, and SPAM. EVP of Retail John Ghingo confirmed “double-digit advertising increases in the second half,” underpinned by data-backed targeting and measurement. These martech investments are designed to increase trial, retention, and personalization, especially across e-commerce and retail platforms.

• Localization and Tech-Driven Innovation in China Fuel Growth: In its international segment, Hormel is leveraging localized product development and market-specific innovation engines to meet rising demand in China. The recent launch of Hormel Barbecue Bites was driven by in-country analytics and trend monitoring. CEO Jim Snee noted this was “just one example of the team’s deep understanding of consumer trends and their ability to create meaningful innovations,” enabled by local R&D investments.

Go Deeper -> Hormel Foods Quarterly Earnings – MarketBeat