Hormel Foods Corporation

Third-quarter organic net sales declined 2% year over year. Gross profit was $472 million and gross margin was 15.9%. Adjusted operating margin was 9%, up 60 basis points year over year, and adjusted EPS was $0.37, up 6% versus last year. For the year, management raised fiscal 2026 adjusted EPS guidance to $1.45 to $1.51 from $1.43 to $1.51, and narrowed full-year organic net sales growth to 1% to 2% from 1% to 4%. It also expects fiscal 2026 net sales of $12.1 billion to $12.2 billion and adjusted operating income/adjusted EPS growth of 6% to 10% year over year.

Jeff Ettinger framed the quarter as solid and said the company is making progress on strengthening execution, improving profitability, and collaborating more effectively across the enterprise. He emphasized that the team is delivering profitable growth through pricing, mix, efficiency, and SG&A actions, while also sharpening the portfolio through divestitures and business exits. His tone was constructive and confident, especially around the company’s ability to deliver adjusted earnings growth at or above its long-term algorithm.

Paul Kuehneman detailed the quarter’s financial drivers, noting gross profit of $472 million, gross margin of 15.9%, adjusted operating margin of 9%, and adjusted EPS of $0.37. He said operating cash flow was $241 million, up 54% year over year, capital expenditures were $68 million, and cash on hand ended at $840 million, up $169 million since fiscal 2025 year-end. He also highlighted $161 million returned to stockholders via dividends and reiterated that lower commodity costs should help margins over time, though benefits are delayed by inventory timing, while freight, logistics, beef, and some poultry-related costs remain pressured.

Analysts focused on why sales guidance was tightened to 1% to 2% and how the company can still raise EPS guidance despite weaker retail volumes. Management said the top line reflects year-to-date performance and fourth-quarter expectations, while bottom-line improvement is coming from mix, pricing, SG&A actions, and better cost discipline even as volumes weigh on plant throughput. Questions also centered on retail volume declines, delayed commodity cost benefits, International noise from Brazil and a legal entity transition, and 2027 setup; management said foodservice remains strong, retail brands like Jennie-O and Applegate are gaining traction, and International underlying demand remains intact despite quarter-specific disruptions.