Hormel Foods raised and narrowed its fiscal 2026 adjusted earnings outlook following its third quarter, with management pointing to strong year-to-date performance, continued progress on strategic initiatives and resilience across several priority brands and the Foodservice business.
Hormel now expects adjusted operating income between approximately $1.08 billion and $1.12 billion for fiscal 2026.
That represents projected growth of 6% to 10% year-over-year.
Adjusted diluted EPS is expected between $1.45 and $1.51, also representing growth of 6% to 10%.
The previous adjusted EPS range was $1.43 to $1.51, meaning Hormel raised the lower end of its outlook while maintaining the previous high end.
Third-quarter net sales totaled $2.96 billion.
Reported operating income was $111 million, producing an operating margin of 3.7%.
Adjusted operating income was substantially higher at $266 million, with an adjusted operating margin of 9%.
Reported diluted EPS was $0.11, while adjusted diluted EPS reached $0.37.
Hormel generated $241 million of operating cash flow during the quarter.
The considerable difference between GAAP and adjusted results reflects several portfolio and restructuring-related items.
Hormel’s updated GAAP operating-income outlook is $830 million to $870 million, below the adjusted range because it includes the estimated loss associated with the Brazil divestiture, a non-cash impairment charge tied to a minority investment in Indonesia and a litigation settlement.
Reported diluted EPS guidance was reduced to $1.06 to $1.12 from the previous $1.28 to $1.37 range, while the adjusted outlook improved.
Hormel announced during Q3 that it would sell its Brazil operations, which operate under the Ceratti brand.
The transaction closed early in the fourth quarter.
Management said the divestiture is part of an effort to simplify the portfolio and focus international investment on markets offering the strongest long-term growth opportunities.
Operational performance varied across businesses.
Retail organic net sales declined 3%, with weakness in commodity turkey and private-label snack nuts partly offset by growth in value-added turkey, contract manufacturing and Planters snack nuts.
Other priority brands producing solid growth included SPAM products, Applegate natural and organic meats and Hormel chili.
Foodservice remained an important positive area.
Management said the business once again outperformed industry trends, supported by solutions-oriented products and operator partnerships.
That resilience is particularly significant in a consumer environment management described as remaining under pressure.
Hormel’s updated outlook indicates management believes the company’s underlying earnings can continue growing even while portfolio changes and one-time charges create noise in reported results.
The positive earnings angle is therefore not the company’s GAAP performance, which is being affected by several unusual charges, but the continued improvement expected in underlying adjusted earnings.
KEY QUOTES:
“We delivered solid third quarter results, growing our adjusted earnings and continuing to advance our fiscal 2026 objectives.”
“With our strong year-to-date performance and continued opportunities ahead, we are raising and narrowing our adjusted earnings outlook for fiscal 2026 and remain confident in delivering adjusted earnings growth for the year consistent with, or above, our long-term algorithm.”
Jeff Ettinger, Interim Chief Executive Officer of Hormel Foods
“Several of our Retail priority brands delivered growth, and Foodservice once again outperformed industry trends, supported by the strength of our solutions-based offerings and operator partnerships.”
John Ghingo, President and Chief Executive Officer-Elect of Hormel Foods
