HRL · Hormel Foods Corporation

Hormel Foods reported a strong second quarter for fiscal 2026, with net sales rising 2.5% to $2.97 billion and organic net sales up 3%, marking the sixth consecutive quarter of organic top-line growth. The company's focus on value-added proteins and portfolio shaping is yielding results, as all three segments—Retail, Foodservice, and International—posted both net sales and segment profit growth. Adjusted operating income increased 11% to $294 million, and adjusted diluted EPS grew 14% to $0.40, driven by higher organic sales, improved manufacturing performance, and lower SG&A expenses (adjusted SG&A as a percent of sales remained flat at 8.2%). The GAAP results were significantly impacted by a $61 million loss on the sale of the whole-bird turkey business, which reduced GAAP operating margin to 7.3% from 8.6% a year ago; however, adjusted operating margin expanded to 9.9% from 9.1%. Management commentary highlighted broad-based strength, with interim CEO Jeff Ettinger noting "double-digit growth in adjusted earnings" and President John Ghingo emphasizing that "each segment delivered both net sales and segment profit growth." Guidance for fiscal 2026 was largely reaffirmed, with net sales of $12.2–$12.5 billion and adjusted diluted EPS of $1.43–$1.51. The updated GAAP EPS range of $1.28–$1.37 reflects the divestiture loss, but the adjusted outlook remains unchanged, implying management's confidence in underlying momentum. Cash flow from operations was $179 million, and the company returned $161 million to shareholders via dividends, ending the quarter with $827 million in cash. The portfolio transformation, including the exit from the whole-bird turkey business, positions Hormel for more stable, higher-margin growth. Overall, the quarter demonstrated profitable volume growth, margin expansion, and successful execution of strategic priorities, supporting a positive investor outlook.