Hormel Foods maintains 2026 sales outlook despite cost pressures

USA – Hormel Foods has maintained its fiscal 2026 revenue and earnings guidance even as it prepares for heavier cost pressure from fuel, logistics and raw materials in the coming quarters.

The company, which owns brands including Jennie-O turkey and Black Label bacon, kept its full-year sales forecast at US$12.2B to US$12.5B after reporting 3% organic growth in the second quarter.

It also maintained its 1% to 4% organic sales growth expectation for the year, although management warned that rising fuel costs would have a greater impact in the third quarter than earlier in the year.

Hormel president John Ghingo said fuel expenses increased sharply during the quarter and became a key pressure point for the business outlook.

He added that consumer sentiment remains weak, even though demand for food has stayed stable, especially in protein categories where the company has a strong market position.

The company reaffirmed its adjusted diluted earnings per share guidance of US$1.43 to US$1.51, reflecting expected growth of 4% to 10%.

However, it lowered its reported diluted earnings per share forecast to US$1.28 to US$1.37 after accounting for the sale of its whole-bird turkey business, which is expected to reduce annual sales by about US$50M.

Interim chief executive Jeffrey Ettinger said the company is on track to reach the upper end of its earnings range, but is keeping its outlook unchanged due to ongoing uncertainty in operating conditions.

Segment performance and margin pressure

Acting chief financial officer Paul Kuehneman said pork and beef prices remained elevated in the second quarter and are likely to remain a challenge through the rest of the fiscal year.

He also pointed to continued pressure from fuel and freight costs, along with inventory adjustments in the ambient foods category, as key factors affecting second-half performance.

Kuehneman added that the company expects temporary cost pressure from lower plant utilisation as it works through inventory changes, even though the adjustments are intended to improve efficiency over time.

Looking at segment performance, Hormel expects retail sales to range from flat to low-single-digit growth, foodservice to rise in the mid-single digits, and international sales to grow at a high-single-digit pace.

Ettinger said much of the earnings improvement for the second half is now expected to land in the fourth quarter, as higher fuel costs and commodity inflation continue to affect near-term results.

Ghingo also noted that margins are likely to come under pressure despite recent pricing actions across retail and foodservice channels, with freight and commodity costs still elevated.

He added that while branded retail performance and consumption trends remain steady, the next quarter is likely to be uneven due to overlapping operational and cost pressures.

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