Hormel trims 2026 sales view, lifts adjusted EPS

Hormel’s third-quarter performance and sales decline

Hormel Foods (HRL) reported third-quarter fiscal 2026 net sales of approximately $2.96 billion, representing a 2.4% decline from the prior-year period. Organic net sales fell 2% in the quarter, indicating pressure across parts of the portfolio beyond items affected by acquisitions or divestitures.

Company leadership said the quarterly results reflected the combined impacts of portfolio-shaping actions, lower commodity-based pricing in portions of the business, and a consumer environment that remains under pressure. Within the portfolio, declines in commodity turkey and private-label snack nuts were identified as notable headwinds to organic net sales.

Management also pointed to more resilient areas, noting that several retail priority brands delivered growth and that the Foodservice business outperformed industry trends. These stronger segments helped offset some of the weakness in commodity and private-label categories but did not fully counteract the overall revenue decline.

In conjunction with the quarterly results, Hormel (HRL) updated its fiscal 2026 net sales guidance to a range of $12.1 billion to $12.2 billion. The company also narrowed its organic net sales growth expectation to a range of 1%–2%, focusing investor expectations on more modest expansion for the year.

Management tied the guidance changes to current demand conditions and ongoing portfolio actions. The updated ranges incorporate both softer consumer trends and the effects of structural changes such as asset sales and pricing adjustments in commodity-exposed categories.

Despite lowering its top-line outlook, Hormel raised its adjusted diluted earnings per share guidance for fiscal 2026 to a range of $1.45 to $1.51. The company also set GAAP diluted EPS guidance at $1.06 to $1.12 for the year, capturing the impact of one-time and non-cash items.

Operating income guidance was updated to a range of $0.83 billion to $0.87 billion. At the same time, adjusted operating income guidance was increased to $1.08 billion to $1.12 billion, highlighting a distinction between reported results and underlying performance after excluding specified items.

The operating income range includes estimated impacts from the divestiture of the Brazil business, a non-cash impairment related to a minority investment in Indonesia, and a litigation settlement. These factors, together with cost initiatives and business mix, shape the expected earnings profile for the balance of fiscal 2026.

During the third quarter, Hormel announced a definitive agreement to sell its Brazil operations, which operated under the Ceratti brand, and classified the business as held for sale. The transaction closed in the early part of the fourth quarter of fiscal 2026, marking a notable step in the company’s portfolio-shaping strategy.

The expected impacts of the Brazil divestiture are reflected in Hormel’s updated net sales, operating income, and earnings guidance for fiscal 2026. Beginning in the fourth quarter of fiscal 2026, the divested business will be excluded from year-over-year comparisons in certain non-GAAP organic volume and organic net sales metrics.

These actions align with broader initiatives to transform and modernize the business and adjust the portfolio mix. Together with cost-related measures and restructuring efforts, the divestiture and other adjustments are intended to support Hormel’s longer-term focus on higher-value and branded offerings, even as near-term sales expectations are tempered.