Hormel Mixed Q1: Retail Weakness Weigh On Strong Foodservice, International Sales

Hormel Foods Corp (NYSE:HRL) stock fell on Thursday after the company reported mixed first-quarter FY26 results.

Earnings Snapshot

The company reported adjusted earnings per share of 34 cents, beating the analyst consensus estimate of 32 cents.

However, sales of $3.03 billion missed the Street view of $3.07 billion.

The company reported operating income of $244 million and adjusted operating income of $247 million, resulting in an operating margin of 8% and an adjusted operating margin of 8.2%.

Cash flow from operations totaled $349 million in the quarter.

Inventories at quarter-end were $1.6 billion, and cash on hand stood at $868 million.

Segment Performance

Retail volume declined 6% and net sales fell 2% in the quarter, both of which continued to be impacted by strategic exit from select non-core private label snack nut items and weaknesses in branded and private label packaged deli items.

Foodservice volume remained flat while net sales rose 7% led by strong performance across the customized solutions business, premium prepared proteins, and branded pepperoni.

International volume increased 1% and net sales upped 8% on strong performance in the multinational businesses and branded exports, thanks to SPAM luncheon meat.

Whole-Bird Turkey Unit Sale

This month, the company announced the decision to sell its whole-bird turkey business to Life-Science Innovations, in line with Hormel's focus on expanding value-added protein offerings.

The sale is expected to close by the end of the company’s second quarter of FY26.

“These strategic transactions enable us to focus resources on high-growth opportunities that meet evolving consumer needs while reducing our exposure to volatile commodity markets,” said President John Ghingo. “The Jennie-O branded portfolio remains a strategic and important part of our growth strategy, and this move positions us to accelerate growth in value-added turkey categories where we have a clear consumer advantage.”

Outlook

The firm reaffirmed its FY26 adjusted earnings of $1.43 to $1.51 per share, versus the $1.47 that analysts projected.

The company forecasts sales of $12.2 billion to $12.5 billion, compared with the $12.384 billion analyst estimate.

During the conference call, Hormel Foods stated that it expects adjusted EPS in the second quarter to remain flat or slightly increase compared with 2025, signaling steady performance amid ongoing market conditions.

HRL Price Action: Hormel Foods shares are down 0.43% at $25.24 at publication on Thursday.

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