Hormel Foods Cuts Annual Sales Outlook and Stock Falls 9% After Q3 Revenue Miss

Hormel Foods reported fiscal third-quarter results on August 27 that beat adjusted earnings estimates but missed on revenue, sending shares down roughly 9.3% on the day and below the stock's 200-day moving average of $23.46. Adjusted non-GAAP EPS came in at $0.37, beating estimates by $0.02, while revenue of $2.96 billion fell about $80 million short of the $3.03 billion consensus. Net income collapsed 67.6% year over year to $59.6 million, and operating income fell 53.7% to $110.9 million, weighed down by three discrete pre-tax charges: a $56 million loss on the divestiture of its Brazil business, a $48 million impairment in Indonesia, and a $38 million litigation settlement.

Operating expenses rose 25% year over year to $323.5 million. By segment, Retail net sales fell 4.3% to $1.78 billion and International dropped 4.7% to $0.18 billion, while Foodservice grew 1.6% to $1.00 billion and posted its 12th consecutive quarter of organic net sales growth, up 2% organically. Lower commodity prices for turkey and nuts, sluggish consumer demand, and food inflation all weighed on results, with organic net sales declining 2% overall in the quarter.

Hormel cut its full-year fiscal 2026 net sales guidance to a range of $12.1 billion to $12.2 billion, down from a prior range of $12.2 billion to $12.5 billion, and lowered its GAAP diluted EPS outlook to $1.06 to $1.12. However, the company raised its adjusted non-GAAP operating income guidance to $1.08 billion to $1.12 billion, reflecting growth of 6% to 10%, and lifted its adjusted EPS outlook. Operating cash flow strengthened sharply, rising 53.5% to $240.6 million in the quarter, and free cash flow for the full year is expected to exceed $700 million, supporting the company's roughly 5% dividend yield.