Q3 2026 Hormel Foods Corp Earnings Call Transcript
Key Points
- Adjusted earnings per share increased 6% year-over-year, with adjusted operating margins expanding 60 basis points to 9%.
- Foodservice segment delivered its 12th consecutive quarter of organic net sales growth, with profit growth outpacing sales and continued margin expansion.
- Priority retail brands like Jennie-O ground turkey, Applegate, Hormel Chili, and Planters showed strong consumption growth and marketplace momentum.
- The company raised and narrowed its fiscal 2026 adjusted EPS guidance to $1.45-$1.51, reflecting confidence in delivering growth at or above its long-term algorithm.
- Operating cash flow increased 54% to $241 million, driven by improved inventory management and working capital performance, while maintaining a strong balance sheet with $840 million in cash.
- Organic net sales declined 2% in Q3, impacted by portfolio shaping actions, softer commodity markets, and a challenged consumer environment.
- Retail volumes declined significantly, with about half of the decline from deliberate exits (whole bird turkey, private label snack nuts) and additional softness from pricing elasticities and weak consumer takeaway.
- International segment was negatively impacted by a loss on the Brazil divestiture, an impairment on a minority investment in Indonesia, and a one-time legal entity transition that delayed SPAM export sales.
- Supply chain costs increased due to inventory rebalancing, lower production volumes, higher temperatures affecting turkey yields, and severe weather-related power outages.
- Freight and fuel costs remained elevated, with fuel prices returning to higher levels, creating ongoing year-over-year headwinds and pressuring margins.
Hello, everyone. Thank you for joining us, and welcome to the Hormel Foods Corporation third-quarter earnings call. (Operator Instructions)
I will now hand the conference over to Jess Blomberg, Director of Investor Relations. Please go ahead.
Good morning. Welcome to the Hormel Foods conference call for the third quarter of fiscal 2026. We released results this morning before the market opened. If you did not receive a copy of the release, you can find it on our website, hormelfoods.com under the Investors section, along with supplemental slide materials. On our call today is Jeff Ettinger, Interim Chief Executive Officer; John Ghingo, President and Chief Executive Officer Elect; and Paul Kuehneman, Interim Chief Financial Officer and Controller.
Jeff, John, and Paul will review the company's fiscal 2026 third-quarter results and provide a perspective on the remainder of the year. We will conclude with the Q&A portion of the call. (Operator Instructions) At the conclusion of this morning's call, A webcast replay will be posted to
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