Hormel Foods Corporation (HRL) Q3 2026 Financial Results Summary
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Hormel Foods (HRL) Q3 2026: Revenue Decline, EPS Growth — Cautiously Optimistic
Hormel Foods Corporation (NYSE: HRL) reported its third-quarter fiscal 2026 results, revealing a mixed performance compared to the prior year. The company experienced a decline in net sales but managed to grow its adjusted earnings per share (EPS).
Key Findings
- Net Sales: $2.96 billion, a decrease of $0.08 billion or -2.4% YoY.
- Adjusted Diluted EPS: $0.37, an increase of $0.02 or +5.7% YoY.
Analyst View
This quarter presents a mixed bag for shareholders. While the decline in net sales is concerning, the growth in adjusted EPS indicates that Hormel is effectively managing its costs and improving profitability. The company's ability to raise and narrow its adjusted EPS outlook for the fiscal year is a positive sign, suggesting confidence in its operational strategies despite external pressures.
Detailed Metrics
- Operating Income: $111 million; adjusted operating income of $266 million.
- Operating Margin: 3.7%; adjusted operating margin of 9.0%.
- Cash Flow from Operations: $241 million, an increase of 54% compared to the prior year.
- Diluted EPS: $0.11, down from $0.33 in Q3 2025; adjusted diluted EPS of $0.37, up from $0.35 in Q3 2025.
- Dividend: The company returned $161 million to stockholders through dividends during the quarter.
Guidance Changes
Hormel has updated its fiscal 2026 guidance:
- Net Sales: Expected to be in the range of $12.1 billion to $12.2 billion, down from the previous range of $12.2 billion to $12.5 billion.
- Adjusted Operating Income: Raised to a range of $1.08 billion to $1.12 billion, reflecting growth of 6% to 10%.
- Adjusted Diluted EPS: Increased to a range of $1.45 to $1.51, also reflecting growth of 6% to 10%.
Strategic Initiatives
The company is undergoing portfolio-shaping actions, including the divestiture of its Brazil operations, which is expected to streamline its focus on markets with stronger growth potential. This strategic move is part of Hormel's ongoing efforts to enhance operational efficiency and profitability.
Segment Performance
- Retail Segment:
- Volume down 9%; organic volume down 9%.
- Net sales down 4%; organic net sales down 3%.
- Foodservice Segment:
- Volume down 1%; organic volume down 1%.
- Net sales up 2%; organic net sales up 2%.
- Marked the 12th consecutive quarter of organic net sales growth.
- International Segment:
- Volume down 11%; organic volume down 11%.
- Net sales down 5%; organic net sales down 4%.
Forward Catalysts
Investors should watch for the impact of the Brazil divestiture in the upcoming quarters, as it may significantly affect Hormel's financial metrics and operational focus. Additionally, the company's ability to navigate the current consumer environment and manage commodity pricing will be crucial for sustaining profitability.
In conclusion, while Hormel Foods faces challenges with declining sales, its strategic initiatives and improved earnings metrics provide a cautiously optimistic outlook for shareholders. The upcoming quarters will be critical in assessing the effectiveness of these strategies and the company's overall performance.
Here are the extracted tables from the press release:
HORMEL FOODS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
In thousands, except per share amounts
Note: All amounts are in thousands.
| July 26, 2026 | July 27, 2025 | Nine Months Ended | July 26, 2026 | July 27, 2025 | |
|---|---|---|---|---|---|
| Net Sales | $2,961,xxx | $3,030,xxx | $8,963,xxx | $8,920,xxx | |
| Cost of Goods Sold | $2,489,xxx | $2,545,xxx | $7,501,xxx | $7,473,xxx | |
| Gross Profit | $471,5xx | $487,xxx | $1,462,xxx | $1,446,xxx | |
| Selling, General and Administrative Expenses | $323,5xx | $258,xxx | $883,xxx | $773,1xx | |
| Equity in Earnings of Affiliates | -$37,1xx | $11,1xx | -$4,0xx | $42,614 | |
| Operating Income | $110,9xx | $239,xxx | $571,xxx | $716,4xx | |
| Interest Income | $6,661 | $4,877 | $19,6xx | $18,596 | |
| Interest Expense | $19,635 | $19,4xx | $59,1xx | $58,438 | |
| Other Income | $5,227 | $11,3xx | $11,3xx | $8,488 | |
| Net Earnings Before Income Taxes | $103,1xx | $236,xxx | $543,xxx | $685,0xx | |
| Provision for Income Taxes | $43,638 | $52,8xx | $144,xxx | $151,1xx | |
| Effective Tax Rate | 42.3% | 22.3% | 26.7% | 22.1% | |
| Net Earnings | $59,519 | $183,xxx | $398,xxx | $533,9xx | |
| Less: Net Earnings Attributable to Noncontrolling Interests | -$55 | -$46 | -$182 | -$366 | |
| Net Earnings Attributable to Hormel Foods Corporation | $59,573 | $183,xxx | $398,xxx | $534,3xx | |
| Net Earnings Per Share: Basic | $0.11 | $0.33 | $0.72 | $0.97 | |
| Diluted | $0.11 | $0.33 | $0.72 | $0.97 | |
| Weighted-average shares used to compute net income per share: Basic | 550,6xx | 550,xxx | 550,xxx | 550,0xx | |
| Diluted | 551,0xx | 550,xxx | 550,xxx | 550,3xx | |
| Dividends Declared Per Share | $0.2925 | $0.29xx | $0.87xx | $0.8700 |
HORMEL FOODS CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF FINANCIAL POSITION
In thousands
Note: All amounts are in thousands.
| July 26, 2026 | October 26, 2025 | |
|---|---|---|
| Assets | ||
| Cash and Cash Equivalents | $839,639 | $670,679 |
| Short-term Marketable Securities | $28,807 | $32,909 |
| Accounts and Other Receivables, Net | $733,460 | $813,989 |
| Inventories | $1,801,567 | $1,747,279 |
| Taxes Receivable | $58,688 | $96,791 |
| Prepaid Expenses and Other Current Assets | $53,420 | $44,010 |
| Assets Held for Sale | $10,659 | — |
| Total Current Assets | $3,526,238 | $3,405,656 |
| Goodwill | $4,867,763 | $4,924,087 |
| Intangible Assets | $1,572,850 | $1,647,297 |
| Pension Assets | $204,135 | $211,826 |
| Investments in Affiliates | $527,864 | $533,984 |
| Other Assets | $430,139 | $431,500 |
| Property, Plant, and Equipment, Net | $2,163,025 | $2,238,770 |
| Total Assets | $13,292,014 | $13,393,119 |
| Liabilities and Shareholders’ Investment | ||
| Accounts Payable & Accrued Expenses | $771,154 | $787,350 |
| Accrued Marketing Expenses | $133,313 | $113,947 |
| Employee-related Expenses | $250,072 | $273,402 |
| Interest and Dividends Payable | $175,646 | $180,700 |
| Taxes Payable | $10,690 | $18,752 |
| Current Maturities of Long-term Debt | $505,634 | $6,646 |
| Liabilities Held for Sale | $27,483 | — |
| Total Current Liabilities | $1,873,991 | $1,380,796 |
| Long-term Debt Less Current Maturities | $2,349,489 | $2,850,778 |
| Pension and Postretirement Benefits | $351,174 | $358,984 |
| Deferred Income Taxes | $653,360 | $661,349 |
| Other Long-term Liabilities | $204,345 | $225,397 |
| Accumulated Other Comprehensive Loss | -$236,907 | -$243,646 |
| Other Shareholders’ Investment | $8,096,561 | $8,159,461 |
| Total Liabilities and Shareholders’ Investment | $13,292,014 | $13,393,119 |
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