Hormel Foods reported third-quarter adjusted earnings per share of $0.37, exceeding the $0.35 consensus estimate, but net sales of $2.96 billion missed the $3.05 billion forecast. Revenue declined 2.4% year-over-year from $3.03 billion, with organic net sales down 1.7%. The company cited portfolio adjustments, lower commodity pricing, and a challenging consumer environment as key factors behind the shortfall.
The retail segment saw the steepest decline, with net sales falling 4.3% to $1.78 billion. The foodservice segment, however, extended its streak of organic growth, posting a 1.6% increase to $1.00 billion for its 12th consecutive quarterly gain. International sales dropped 4.7% to $178.7 million.
Adjusted operating margin expanded to 9.0% from 8.4% in the prior-year period, while operating cash flow surged 54% year-over-year to $241 million. The company returned $161 million to shareholders through dividends. Shares fell 1.98% in pre-market trading following the results.
For fiscal 2026, Hormel raised its adjusted EPS guidance to a range of $1.45 to $1.51, with a midpoint of $1.48, though this remains below the $1.50 consensus. Revenue guidance was lowered to $12.1 billion to $12.2 billion, down from the prior $12.2 billion to $12.5 billion range. The midpoint of $12.15 billion trails the $12.24 billion consensus estimate.
"We delivered solid third quarter results, growing our adjusted earnings and continuing to advance our fiscal 2026 objectives," said Jeff Ettinger, interim chief executive officer. "With our strong year-to-date performance and continued opportunities ahead, we are raising and narrowing our adjusted earnings outlook for fiscal 2026."
