Hormel, known for kitchen staples such as Applegate, Skippy, and SPAM, narrowed its expectations during its earnings call Thursday but maintained its top-line expectation of $12.2 billion in net sales for the FY 2025.

The extensive offerings and categories Hormel operates in enables the Austin, Minn.-based brand unique insight into the spending habits and sentiments of consumers.

To this effect, executives noted shoppers are “strained” amid a “choppy environment.”

Much of this uncertainty stems back to President Donald Trump’s tariff regime, which has upended everything from Wall Street’s outlook to inflation expectations. With consumers potentially bracing for higher prices as a result of the foreign policy, Hormel said some are trading down on their shops while others are focusing on maximum value.

Consumers and analysts alike have whiplash from the news out of Washington D.C.: In the past few weeks alone, Trump’s team has reduced sky-high tariffs on China for 90-days, then accused Beijing of breaking the agreement, threatening 50% tariffs on the EU which were then delayed, and successfully appealed a court decision which banned the administration from introducing any of its “Liberation Day” measures.

“I would describe the consumer sentiment as not great, meaning they’re feeling the cumulative effects of inflation and at the same time feeling uncertainty in the macro environment,” John Ghingo, executive vice president of Hormel’s retail division, told analysts on the call. “I would describe that as a strained consumer sentiment. And what’s interesting is you do see some trading down from consumers to lower prices.”

He continued: “Some of our categories actually play very well for affordability, but if we pull back even from that and say, ‘where is the growth coming from?’ … we can see some very different pockets of strong growth because consumers are still looking for solutions.

“They’re still looking for what they would classify… as value. And so within our own portfolio, we see strong growth still in the premium … with our Applegate brand.”

Ghingo added that because consumers are stretched, they want to get maximum value and flexibility out of products—which is where protein products from Applegate and turkey specialists Jennie-O are flourishing.

Tariffs and Hormel

Of course, businesses aren’t only impacted by tariffs because of the effect on customers, but also on their supply chain and relative costs.

Most businesses say they are going to pass costs onto consumers, as the Federal Reserve noted in its May meeting: “Many participants remarked that reports from their business contacts or surveys indicated that firms generally were planning to either partially or fully pass on tariff-related cost increases to consumers.

“Several participants noted that firms not directly subject to tariffs might take the opportunity to increase their prices if other prices rise.”

Some brands, like Walmart, have already warned they may have to increase their prices—earning the ire of the Oval Office.

Hormel, a Fortune 500 company, noted its portfolio has not been impacted by tariffs “to date” (though let’s not forget, the sharpest end of tariff threats are yet to come to fruition), with Jacinth Smiley, executive vice president and CFO at Hormel adding: “Although our business has not been materially impacted by the tariff landscape to date, based on what we know today, we have assumed a range of $0.01 to $0.02 of tariff impacts in the back half of the year in our outlook.”

With that in mind, the brand narrowed its organic net sales growth outlook to a range of 2% to 3% and likewise narrowed its adjusted diluted net earnings per share expectations to $1.58 to $1.68.

That being said, Smiley added: “We remain confident in our outlook for bottom-line growth for each segment in the second half of the year and remain committed to delivering long-term value through strategic execution.”

Overall, Hormel reported Q2 2025 net sales of $2.9 billion with organic net sales up 1%.

In the retail category, net sales were flat with volumes down 7% year-over-year, with segment profits climbing 4%. In the foodservice category, organic volumes were down 1%, and the segment profit was down 4%, though volumes increased 4%. In the international segment, volumes were up 9%, net sales up 7%, though segment profit fell 21%.

Hormel’s share price is up 3.8% over the past five days, down approximately 3% for the year to date.