Hormel reported a “strong” fiscal Q1 with 2% natural internet gross sales progress and adjusted diluted EPS of $0.34, pushed by robust Foodservice and Worldwide efficiency whereas Retail declined.
Gross revenue was pressured by commodity inflation—particularly beef and pork trim (up ~12%)—and rising logistics/freight prices, with administration forecasting solely modest commodity enchancment within the again half of fiscal 2026.
Hormel agreed to promote its whole-bird turkey enterprise to Life‑Science Improvements to cut back publicity to unstable, low‑margin operations (anticipated to cut back internet gross sales by about $50M), and reaffirmed full-year steering of natural gross sales +1–4% and adjusted EPS $1.43–$1.51 whereas anticipating restructuring financial savings to start in Q2.
Hormel Meals (NYSE:HRL) reported what executives described as a “strong” begin to fiscal 2026, delivering 2% natural internet gross sales progress within the first quarter and adjusted diluted earnings per share of $0.34. Administration stated robust leads to Foodservice and Worldwide have been partially offset by a decline in Retail, whereas inflation in key commodities and higher-than-expected logistics prices continued to stress gross revenue.
For the fiscal first quarter, internet gross sales have been “simply over $3 billion,” supported by 2% natural internet gross sales progress, marking the corporate’s fifth consecutive quarter of natural progress. Adjusted working earnings was $247 million and adjusted working margin was 8.2%, with an efficient tax charge of twenty-two.4%. Diluted EPS was $0.33, and adjusted diluted EPS was $0.34.
Interim CEO Jeff Ettinger stated the quarter’s efficiency mirrored the power of Hormel’s “protein-centric portfolio,” highlighting “excessive single-digit natural internet gross sales progress” in each Foodservice and Worldwide together with “spectacular phase revenue progress.” Interim CFO Paul Kuehneman stated gross revenue remained “hampered,” as top-line progress was greater than offset by larger enter prices and logistics bills.
Administration emphasised continued commodity inflation as a headwind, notably for beef, pork trim, and nuts. Kuehneman stated pork trim elevated 12% versus final yr, and whereas the corporate noticed “some reduction on bellies,” beef remained “a major inflationary stress throughout the business.” Hormel stated it expects “a modest enchancment in most commodity markets” within the again half of fiscal 2026, with pork enter prices declining versus fiscal 2025 however nonetheless above the five-year common, whereas beef prices are anticipated to stay excessive all year long and nut prices elevated versus the prior yr.
Executives additionally pointed to tightening freight capability. Kuehneman stated extreme winter climate and business dynamics tightened capability within the refrigerated sector late within the quarter, pushing spot charges larger and creating “modest upward stress” on transportation prices. On the Q&A, Ettinger stated it was “too early to inform” whether or not the freight prices have been seasonal or may persist extra broadly by the yr.
Retail: President John Ghingo stated Retail natural quantity and natural internet gross sales declined within the quarter, with retail internet gross sales down 2% yr over yr. He attributed the top-line decline largely to a strategic exit from “choose non-core personal label snack nut gadgets.” Regardless of the reported decline, Ghingo cited Circana knowledge for the newest 13-week interval ending Jan. 25 exhibiting complete Hormel greenback gross sales up “over 2%,” and stated a number of precedence manufacturers posted year-over-year greenback consumption progress, together with Jennie-O Floor Turkey, Planters snack nuts, Hormel Gatherings celebration trays, Applegate, and Hormel Entrees.
Retail profitability, nonetheless, was “challenged,” pressured by decrease internet gross sales, anticipated will increase in uncooked materials prices, and “sudden will increase in logistics bills.” Ghingo stated the second wave of retail pricing went into impact firstly of the second quarter and was designed to offset price pressures. He added that pricing actions had been “effectively accepted,” with elasticities typically according to expectations.
Foodservice: Ghingo stated Foodservice delivered its tenth consecutive quarter of natural internet gross sales progress, pushed by premium ready proteins and branded pepperoni, and aided by what he described as a solutions-based portfolio for operators going through labor and operational pressures. He cited Austin Blues Smoked Meats, Hormel Hearth Braised Meats, and Hormel Pure Selection Meats as robust performers. Addressing questions on pricing, Ghingo stated foodservice pricing usually lags market strikes, and that first-quarter pricing “got here again according to the market actions,” serving to margins get better what was misplaced within the fourth quarter of fiscal 2025.
Worldwide: Hormel stated Worldwide internet gross sales progress was pushed by its multinational companies and branded exports, led by SPAM luncheon meats. Ghingo additionally highlighted the first-quarter launch of SPAM Hen by the corporate’s China-based innovation group, together with a can and single-serve pouch launched within the Philippines.
Ettinger reiterated progress on the corporate’s “Rework and Modernize” initiative and stated restructuring is “progressing as deliberate,” with monetary advantages anticipated to materialize extra meaningfully starting within the second quarter. Ghingo added that the Hormel Manufacturing System moved past its foundational section, and amenities that absolutely applied it are driving “steady enchancment” and liberating capability on core manufacturing traces.
Ghingo additionally famous steps to simplify the corporate, together with a finalized “new strategic partnership for the Justin’s branded enterprise,” which he stated higher aligns the enterprise with an possession mannequin suited to its progress plan. On expertise, he stated Hormel accomplished one other section of order-to-cash modernization and is nearer to retiring a legacy system. He additionally described utilizing weather-driven demand intelligence to tell promoting selections for Hormel Chili, which administration stated is producing stronger returns on funding.
The corporate highlighted management adjustments aimed toward strengthening execution, together with the appointment of:
Jeff Baker as Group Vice President of Enterprise Enterprise Efficiency
Natosha Walsh as Group Vice President of Retail Gross sales
Jason Levine as Enterprise Chief Advertising and marketing Officer
Domenic Borrelli as Govt Vice President of Retail
Ettinger detailed a definitive settlement to promote Hormel’s complete chook turkey enterprise to Life-Science Improvements (LSI), a transfer he stated reduces publicity to unstable, commodity-driven operations and sharpens give attention to value-added proteins. The sale contains the “hen facet” of the turkey complicated and property together with the Melrose, Minnesota complete chook facility, a Swanville feed mill, related transportation property, and provide contracts with devoted third-party hen growers. The transaction is predicted to shut by the tip of fiscal Q2.
Administration emphasised the sale doesn’t embrace value-added turkey merchandise, and Hormel will proceed to personal and use the Jennie-O model title. The corporate will retain the flexibility to promote Jennie-O Oven Prepared complete birds and turkey breasts and can proceed to personal and function different turkey property associated to tom manufacturing used for value-added merchandise. Hormel additionally stated most Jennie-O complete chook gross sales for the 2026 vacation season will stay in reported fiscal 2026 outcomes, with LSI offering co-manufacturing providers by the tip of fiscal 2026.
For fiscal 2026, Kuehneman stated the divestiture is predicted to have a minimal impression on adjusted financials, with internet gross sales diminished by about $50 million. On an annualized foundation, the enterprise usually generated $200 million to $275 million in internet gross sales and was characterised by “excessive volatility and low margins.” Ettinger stated it’s “considerably dilutive” to retail margins in a typical yr, with extra worthwhile years described as outliers.
Wanting forward, Hormel reaffirmed full-year steering for natural internet gross sales progress of 1% to 4% and adjusted diluted EPS of $1.43 to $1.51, with adjusted working earnings anticipated to develop 4% to 10%. For the second quarter, administration expects one other quarter of top-line progress and adjusted diluted EPS “flat to barely up” yr over yr, citing the good thing about the second wave of retail pricing and the beginning of restructuring financial savings, whereas noting ongoing stress from commodities and elevated logistics prices.
Hormel additionally highlighted liquidity and shareholder returns. Working money move was $349 million, capital expenditures have been $69 million (with tasks together with an ambient meat snacking facility in Jiaxing, China, and continued knowledge and expertise funding), and the corporate reiterated its dedication to its dividend, noting it paid its 390th consecutive quarterly dividend and returned roughly $160 million to shareholders by dividends throughout the quarter.
Hormel Meals Company is a world branded meals firm primarily engaged within the manufacturing, advertising and marketing and distribution of value-added, high-quality meat and meals merchandise. The corporate’s portfolio spans a spread of classes together with refrigerated and frozen meats, pantry staples, specialty meals and shelf-stable gadgets. By means of manufacturing amenities positioned throughout North America and worldwide markets, Hormel Meals provides retail grocers, foodservice operators, comfort shops and e-commerce platforms.
Amongst its best-known manufacturers, Hormel Meals produces SPAM® canned meats, Jennie-O® turkey merchandise, Skippy® peanut butter and Applegate® pure and natural meats.
