Hormel Foods cuts annual sales guidance
Hormel raises adjusted earnings forecasts despite weaker retail sales, declining international performance and continued pressure on the consumer environment.
USA – Hormel Foods has lowered its full-year organic sales growth guidance after weakness in its turkey and snacks businesses contributed to a decline in third-quarter net sales.
The owner Skippy peanut butter now expects annual organic net sales growth of 1% to 2%, compared with its previous forecast of 1% to 4%. Annual net sales are projected at $12.1 billion to $12.2 billion.
Hormel said the revised organic sales outlook reflects the impact of the sale of its Brazil business and its assessment of the external environment. Starting in the fiscal fourth quarter, the divested Brazilian unit will be excluded from year-over-year non-GAAP organic volume and organic net sales comparisons.
The company raised its adjusted operating income outlook to $1.08 billion-$1.12 billion and increased adjusted earnings per share (EPS) guidance to $1.45-$1.51. Both measures imply growth of 6% to 10%. However, Hormel lowered its diluted EPS guidance to $1.06-$1.12 from $1.28-$1.37.
Third-quarter net sales fell 2.4% year over year to $2.96 billion, while organic net sales declined 2%. Operating income dropped to $111 million from $239.7 million, while adjusted operating income increased to $266 million from $254.2 million.
“While net sales declined, the results reflected the impacts of portfolio-shaping actions, lower commodity-based pricing in portions of the business and a consumer environment that remains under pressure,” said John Ghingo, president and CEO-elect.
Hormel’s retail segment reported a 4.3% decline in net sales, while segment profit fell 3.7%. Weakness in commodity turkey and private-label snack nuts was partly offset by gains in value-added turkey products, contract manufacturing and Planters snack nuts. Volume also increased for Hormel Black Label bacon and Applegate natural and organic meats.
Foodservice was the strongest-performing segment, with net sales rising 1.6% and segment profit increasing 2.7%.
International net sales declined 4.7%, while the segment recorded a $29 million loss. Hormel said profit was “significantly impacted” by a non-cash impairment charge in Indonesia.
Interim CEO Jeff Ettinger said: “We delivered solid third quarter results, growing our adjusted earnings and continuing to advance our fiscal 2026 objectives.”
He added that the company was raising and narrowing its adjusted earnings outlook, citing strong year-to-date performance and continued opportunities ahead.
Ettinger said Hormel remained confident in delivering adjusted earnings growth for fiscal 2026 consistent with, or above, its long-term algorithm.
The company said its updated outlook reflects its current expectations for fiscal 2026 performance across its businesses and markets.
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