Hormel Foods reported third-quarter fiscal 2026 adjusted diluted earnings per share of $0.37, up 6% year-over-year and exceeding analyst forecasts by $0.02. GAAP diluted EPS came in at $0.11, down from $0.33 in the prior-year period, reflecting one-time charges tied to portfolio restructuring.
Net sales for the quarter totaled $2.96 billion, missing the $3.05 billion consensus estimate by nearly $90 million. Organic net sales declined 2% year-over-year, as divestitures of brands such as Justin’s and private-label snack nuts continued to weigh on revenue. Adjusted operating margin expanded by 60 basis points to 9%, driven by cost efficiencies despite volume declines.
The company’s retail segment reported a 9% volume decline and a 4% drop in net sales, with organic net sales down 3% and segment profit falling 4%. In contrast, the foodservice segment recorded its 12th consecutive quarter of organic net sales growth, with a 2% increase in net sales and a 3% rise in segment profit, despite a 1% volume decline. The international segment saw GAAP segment profit fall 254% due to a non-cash impairment charge on a minority investment in Indonesia, while organic net sales declined 4% and volume dropped 11%.
Hormel updated its full-year fiscal 2026 guidance, narrowing its net sales outlook to $12.1 billion to $12.2 billion, implying organic net sales growth of 1% to 2%. Adjusted operating income guidance was raised to $1.08 billion to $1.12 billion, while adjusted diluted EPS was increased and narrowed to $1.45 to $1.51, representing expected growth of 6% to 10% year-over-year. GAAP operating income is projected at $826 million to $869 million, with GAAP diluted EPS expected between $1.06 and $1.12.
The company also outlined expected one-time charges for the full year, including $94.9 million in divestiture losses, $49 million to $52 million in Transform and Modernize initiative costs, $48.2 million in impairments, $37.5 million in litigation settlements, $8.5 million in corporate restructuring charges, and $7.8 million in consulting agreement costs. Capital expenditures for the year are projected at $260 million to $290 million.
Hormel maintained its long-term organic net sales growth target of 2% to 3% and operating income growth target of 5% to 7%, though management noted that portfolio reshaping activities would continue to influence near-term performance.
