Hormel Foods (HRL) investor relations material

Executive summary

• Adjusted earnings per share grew 6% year-over-year to $0.37, despite a 2% decline in organic net sales, driven by portfolio-shaping actions, softer commodity markets, and a pressured consumer environment.

• Foodservice outperformed with its 12th consecutive quarter of organic net sales growth, while Retail and International segments faced declines due to divestitures, impairments, and challenging market conditions.

• Major nonrecurring items included a $56 million loss on Brazil divestiture, $48 million impairment on an Indonesian investment, and a $38 million litigation settlement.

• Leadership transition announced, with John Ghingo appointed CEO and Ash Bhumbla as incoming CFO.

• Cash flow from operations rose 54% year-over-year to $241 million for the quarter and 47% year-to-date to $769 million.

Financial highlights

• Q3 2026 net sales were $2.96 billion, down 2.4% year-over-year; nine-month net sales were $8.96 billion, up 0.5%.

• Adjusted operating income was $266 million, with an adjusted operating margin of 9%.

• Gross profit was $472 million with a gross margin of 15.9%.

• Diluted EPS was $0.11 (GAAP), while adjusted diluted EPS was $0.37.

• Cash on hand at quarter end was $840 million, up $169 million from fiscal 2025.

Outlook and guidance

• Fiscal 2026 adjusted EPS guidance raised and narrowed to $1.45–$1.51, with expected growth of 6%–10% year-over-year.

• Net sales for fiscal 2026 expected in the range of $12.1–$12.2 billion, with organic net sales growth of 1%–2%.

• Adjusted operating income guidance raised to $1.08–$1.12 billion.

• Capital expenditures for fiscal 2026 expected at $260–$290 million.

• Consumer environment expected to remain pressured into 2027.