Hormel Foods reported quarterly revenue that fell short of analyst projections, a result the company attributed to U.S. consumers gravitating toward cheaper alternatives during a period of economic uncertainty. The maker of Skippy peanut butter and other packaged-food items moved to raise prices during fiscal 2025 to partially offset higher costs tied to commodities such as beef and pork, costs that the company said were in part linked to tariff-related uncertainty. Those price increases came as households continued to pare spending amid persistent inflation and broader economic unease.
The company is experiencing particular strain in its retail segment, a core source of revenue. Hormel pointed to several contributors to the weakness in retail, including a strategic exit from certain non-core private-label snack nut products and softer demand across both branded and private-label packaged deli items. On a volume basis, first-quarter retail sales decreased by 6% compared with a 4% decline in the same period a year earlier.
Despite the quarterly top-line miss, Hormel reaffirmed its full-year net sales guidance in a range of $12.2 billion to $12.5 billion, which aligns with consensus expectations of $12.38 billion. The company also reiterated its outlook for adjusted earnings per share in fiscal 2026 of $1.43 to $1.51, versus analyst estimates of $1.47. Management said this forecast does not account for the effect of the company’s recent sale of its underperforming whole-bird turkey unit to Life-Science Innovations, completed in February.
Hormel expects that the turkey business sale will reduce fiscal 2026 net sales by approximately $50 million, but it anticipates only a minimal impact on adjusted earnings per share. The company emphasized that the divestiture was intended to remove a struggling asset from its portfolio while leaving its broader guidance intact.
In the quarter, Hormel reported sales of $3.03 billion, short of analysts’ estimates of $3.07 billion based on LSEG data. On the profitability side, adjusted earnings were 34 cents per share, topping expectations of 32 cents.
Hormel’s results come in a period where peers have also seen varied outcomes. General Mills recently trimmed its annual outlook because of softer demand, while Tyson Foods reported quarterly results that exceeded forecasts as stronger chicken demand offset significant losses in its beef segment.
Separately, an AI-based stock selection service described in the company update evaluates HRL alongside thousands of other firms using more than 100 financial metrics. The service, which highlights fundamentals, momentum, and valuation to identify opportunities, noted past winners in its strategy and invites investors to review whether Hormel is included in current portfolios or if alternative opportunities exist in the same industry space.
Key points
- Hormel missed quarterly revenue estimates with retail sales volumes down 6% year-over-year, driven by consumers trading down amid inflationary pressures.
- The company raised prices in fiscal 2025 to offset commodity cost pressures, while reaffirming full-year net sales guidance of $12.2 billion to $12.5 billion and 2026 adjusted EPS of $1.43 to $1.51.
- Hormel sold its whole-bird turkey business to Life-Science Innovations; the deal is expected to reduce fiscal 2026 net sales by about $50 million but should have minimal impact on adjusted EPS.
Risks and uncertainties
- Continued weakness in retail demand could further pressure sales in the consumer packaged goods and grocery retail sectors.
- Volatility in commodity prices and tariff-related uncertainty remain risks for margin stability within the meat and packaged-foods industries.
- Strategic product exits and portfolio changes - such as the turkey business sale - lower revenue base and create transitional uncertainty for net sales in fiscal 2026.