Hormel Foods Corp.: Q3 FY2026 earnings call

What management said about Q3 FY2026, from the documents filed with the SEC on 27 August 2026: press release. Guidance figures: 3 raised, 4 lowered, 2 new, 2 kept. The quarter’s numbers.

Read the filing

Key takeaways

• Net sales slipped 2 percent: Net sales were $2.96 billion, down 2.4% from $3.03 billion; organic net sales fell 2%. Nine-month net sales rose 0.5% to $8.96 billion. Source
• Adjusted margin 9.0%, GAAP margin 3.7%: Adjusted operating margin was 9.0% against 8.4%, while GAAP operating margin fell to 3.7% from 7.9% after discrete items. Source
• Full-year adjusted EPS guidance raised: Fiscal 2026 adjusted diluted EPS range is now $1.45 to $1.51, with the low end raised from $1.43. GAAP diluted EPS range fell to $1.06 to $1.12. Source
• Retail net sales and profit fell 4%: Retail net sales fell 4% to $1.78 billion and segment profit fell 4% to $118 million; organic net sales were down 3%. Source
• Foodservice net sales up 2%, 12th straight quarter: Foodservice net sales rose 2% to $1.00 billion and segment profit rose 3% to $144 million. The quarter was the 12th consecutive quarter of organic net sales growth. Source
• International profit fell on impairment: International segment profit was a $29 million loss against $19 million of profit a year earlier, driven by a non-cash impairment. Organic net sales fell 4%. Source
• Operating cash flow up 54%: Cash flow from operations was $241 million for the quarter, up 54%. Nine-month operating cash flow was $769 million. Source
• Brazil sale closed in early fourth quarter: The company agreed to sell its Brazil operations (Ceratti brand), classified them as held for sale, and closed the sale early in the fourth quarter to focus international strategy on long-term growth potential. Source

“We delivered solid third quarter results, growing our adjusted earnings and continuing to advance our fiscal 2026 objectives,”

Jeff Ettinger, interim chief executive officer

Guidance

What changed from last quarter

• Guidance lowered: Net sales range lowered to $12.1 to $12.2 billion from $12.2 to $12.5 billion; organic net sales growth lowered to 1% to 2% from 1% to 4%. Source
• Guidance lowered: GAAP operating income range lowered to $0.83 to $0.87 billion from $0.96 to $1.02 billion. Source
• Guidance raised: Adjusted operating income range raised at the low end to $1.08 to $1.12 billion from $1.06 to $1.12 billion. Source
• Guidance lowered: GAAP diluted EPS range lowered to $1.06 to $1.12 from $1.28 to $1.37. Source
• Guidance raised: Adjusted diluted EPS range raised at the low end to $1.45 to $1.51 from $1.43 to $1.51. Source
• New: Company agreed to sell its Brazil operations (Ceratti brand) in the third quarter; the sale closed in early fourth quarter. Source
• New: Starting in the fourth quarter, the divestiture impact is excluded from year-over-year organic volume and organic net sales comparisons. Source
• New: John Ghingo is listed as president and chief executive officer-elect; the prior release listed him as president, with Jeff Ettinger as interim chief executive officer. Source

Results and profit drivers

• Net sales slipped 2 percent: Net sales were $2.96 billion, down 2.4% from $3.03 billion; organic net sales fell 2%. Nine-month net sales rose 0.5% to $8.96 billion. Source
• Adjusted margin 9.0%, GAAP margin 3.7%: Adjusted operating margin was 9.0% against 8.4%, while GAAP operating margin fell to 3.7% from 7.9% after discrete items. Source
• Adjusted EPS rose, GAAP EPS fell: Diluted EPS was $0.11 against $0.33; adjusted diluted EPS was $0.37 against $0.35. Nine-month adjusted diluted EPS was $1.11 against $1.05. Source
• Discrete items lifted pre-tax charges: Discrete pre-tax items were a $56 million Brazil divestiture loss, a $48 million Indonesia impairment and a $38 million litigation settlement. Adjusted pre-tax earnings were $258 million. Source
• Effective tax rate rose to 42.3%: The effective tax rate was 42.3% against 22.3% a year earlier. Management said one-time items significantly affected it; the nine-month rate was 26.7%. Source
• Full-year adjusted EPS guidance raised: Fiscal 2026 adjusted diluted EPS range is now $1.45 to $1.51, with the low end raised from $1.43. GAAP diluted EPS range fell to $1.06 to $1.12. Source

Segments and regions

• Retail net sales and profit fell 4%: Retail net sales fell 4% to $1.78 billion and segment profit fell 4% to $118 million; organic net sales were down 3%. Source
• Foodservice net sales up 2%, 12th straight quarter: Foodservice net sales rose 2% to $1.00 billion and segment profit rose 3% to $144 million. The quarter was the 12th consecutive quarter of organic net sales growth. Source
• International profit fell on impairment: International segment profit was a $29 million loss against $19 million of profit a year earlier, driven by a non-cash impairment. Organic net sales fell 4%. Source
• Brazil weakness offset by minority investments: Adjusted International segment profit was $19 million, flat on last year, as minority investment performance offset weaker results in Brazil. Source

“With our strong year-to-date performance and continued opportunities ahead, we are raising and narrowing our adjusted earnings outlook for fiscal 2026 and remain confident in delivering adjusted earnings growth for the year consistent with, or above, our long-term algorithm.”

Jeff Ettinger, interim chief executive officer

Products and customers

• Value-added turkey and Planters grew: Retail sales gained from value-added turkey offerings, contract manufacturing and Planters snack nuts, partly offsetting declines elsewhere in Retail. Source
• SPAM, Applegate and chili grew: Other Retail priority brands with solid growth were the SPAM family, Applegate natural and organic meats and Hormel chili. Source
• Premium proteins, pepperoni and Jennie-O led Foodservice: Foodservice growth came from multiple product groups, led by premium prepared proteins, branded pepperoni and Jennie-O turkey. Source
• Austin Blues and Natural Choice grew: Austin Blues smoked meats, Hormel Natural Choice meats and Hormel Fire Braised meats also recorded net sales gains. Source

Costs, margins and pricing

• SG&A rose to 10.9% of sales: SG&A was 10.9% of net sales against 8.5% a year earlier. Excluding discrete items, it was 7.3% against 8.1%. Source
• Advertising spend lower at $34 million: Advertising investments were $34 million in the quarter, down from $41 million a year earlier. Source
• Retail profit hit by logistics costs: Retail segment profit fell as lower net sales and higher logistics expenses were partly offset by lower selling, general and administrative expenses. Source
• Pork input costs helped Foodservice profit: Foodservice segment profit rose 3% as higher net sales and favorable pork input costs were partly offset by higher logistics and SG&A. Source

“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.”

John Ghingo, president and chief executive officer-elect

Demand and commodity pricing

• Branded export demand held up: Branded export demand held up through the quarter, but a one-time legal-entity transition reduced recognition of some SPAM export sales. Source
• Foodservice growth despite lower pricing: Organic Foodservice growth was broad-based even with lower commodity-based pricing in parts of the portfolio, according to management. Source
• Commodity turkey and snack nut sales fell: Retail organic net sales declined as commodity turkey and private label snack nut sales decreased, partly offset by other lines. Source

Cash, capital and shareholder returns

• Operating cash flow up 54%: Cash flow from operations was $241 million for the quarter, up 54%. Nine-month operating cash flow was $769 million. Source
• Capital spending slightly lower: Capital expenditures were $68 million against $72 million, with the largest projects in infrastructure and data and technology. Depreciation and amortization was $66 million. Source
• Cash on hand up $169 million: Cash on hand, excluding assets held for sale, was $840 million at quarter end, up $169 million from the end of fiscal 2025. Source
• Inventories rose to $1.8 billion: Inventories were $1.8 billion at quarter end, up $54 million from the end of fiscal 2025. Source
• Dividends returned $161 million: The company returned $161 million to stockholders through dividends in the quarter; dividends declared were $0.2925 per share. Source

Portfolio and strategic investments

• Brazil sale closed in early fourth quarter: The company agreed to sell its Brazil operations (Ceratti brand), classified them as held for sale, and closed the sale early in the fourth quarter to focus international strategy on long-term growth potential. Source
• Indonesia minority stake impaired: A non-cash impairment of $48 million was recorded on a minority investment in Indonesia. Management said such charges are not indicative of core operating performance. Source
• Transform and Modernize savings kept in results: Transform and Modernize savings are not excluded from adjusted results because the company treats them as ongoing; the related nonrecurring costs are excluded. Source

People and leadership

• John Ghingo named CEO-elect: John Ghingo is president and chief executive officer-elect, while Jeff Ettinger remains interim chief executive officer. The prior release listed Ghingo as president. Source
• Former CEO consulting runs to April 2027: The consulting agreement with the former CEO runs until April 2027. Related costs were primarily recognized in the first quarter and are excluded from adjusted results. Source
• Restructuring aims to align workforce: The corporate restructuring plan, begun in the fourth quarter of fiscal 2025, aims to reduce administrative expenses and align the workforce; its charges are mainly severance and benefit costs. Source

Coming up, as management said on 27 August 2026

• Divestiture excluded from organic comparisons: From the fourth quarter of fiscal 2026, the divestiture impact is excluded from year-over-year organic volume and organic net sales comparisons. Source

Figures management reported

Risks management discussed

• Demand: Management cited a consumer environment that remains under pressure as a factor in the quarter's net sales. Source
• External: Lower commodity-based pricing in parts of the business reduced net sales, according to management. Source
• Operational: Higher logistics expenses weighed on Foodservice segment profit, partly offsetting the benefit of higher net sales. Source
• Operational: A one-time legal-entity transition adversely affected recognition of certain SPAM export sales in the International segment. Source
• Financial: The effective tax rate was 42.3%, compared to 22.3% last year, with management citing significant one-time items. Source
• Regulatory: A settlement of an antitrust lawsuit with certain plaintiffs was executed in the quarter. Source

Earlier plans management reported on

• Not stated: Management said it remains confident in delivering fiscal 2026 adjusted earnings growth consistent with or above the long-term algorithm. Source
• Not stated: Management said the company continued to advance its fiscal 2026 objectives during the quarter. Source
• Not stated: Management said it remains committed to disciplined execution and to positioning the company for long-term success. Source
• Not stated: The release says the expected impacts of the divestiture are reflected in the updated fiscal 2026 guidance ranges. Source

Other quarters

• Q2 FY2026 earnings call
• Q1 FY2026 earnings call
• Q4 FY2025 results
• Q3 FY2025 results

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.