Hormel Foods Reports Strong Q1 2026 Results: Key Insights for Investors

Financial Highlights

• Net Sales: Achieved \$3 billion in net sales, representing organic net sales growth of 2%. This marks the fifth consecutive quarter of organic sales growth for the company.
• Earnings:
  • Earnings Before Income Taxes: \$234 million (GAAP), with adjusted earnings before income taxes at \$238 million (Non-GAAP).
  • \$0.33 (GAAP), with adjusted diluted EPS at \$0.34 (Non-GAAP), up 8.2% year-over-year.
• Cash Flow: Cash flow from operations was robust at \$349 million, indicating strong liquidity and operational efficiency.
• Operating Margin: Operating margin and adjusted operating margin were 8.0% and 8.2% respectively, compared to 7.6% and 8.5% in the prior year.
• Dividend: The company returned approximately \$160 million to shareholders via dividends during the quarter.
• Balance Sheet:
  • Cash on hand increased to \$868 million, up \$197 million from fiscal year-end 2025.
  • Inventories decreased to \$1.6 billion, down \$100 million from year-end 2025.
  • Capital expenditures were \$69 million, focused on China meat snack facility and tech investments.
  • Depreciation and amortization expense held steady at \$67 million.

Guidance Update and Forward-Looking Statements

• FY2026 Guidance:
  • Diluted EPS: Updated guidance to \$1.37-\$1.46 per share (GAAP).
  • Adjusted Diluted EPS: Reaffirmed at \$1.43-\$1.51 per share (Non-GAAP), reflecting growth of 4%-10%.
• Guidance implies continued momentum in operational performance and cost control initiatives, potentially supporting share price appreciation.

Executive Commentary

“We delivered solid first quarter fiscal 2026 results, with adjusted diluted earnings per share of \$0.34, supported by our fifth consecutive quarter of organic net sales growth. We continue to execute our strategic initiatives and remain confident in our guidance for the full year.”

Strategic and Operational Developments

• Corporate Restructuring Plan: Hormel commenced a corporate restructuring plan in Q4 2025 aimed at reducing administrative expenses, improving efficiencies, and aligning the workforce with future needs. Charges related to severance and benefits are excluded from adjusted earnings.
• Portfolio Optimization: In Q1 2026, Hormel sold 51% of its equity interest in Justin’s, LLC, resulting in a gain on the sale. This non-core divestiture is excluded from adjusted results and signals a focus on core profitability and growth.
• Legal Matters: No significant new litigation or settlements reported this quarter, following prior antitrust litigation settlement in fiscal 2025.
• Global Expansion: Major capital investments were made in China to expand the ambient meat snack facility, indicating continued global growth ambitions.

Risks and Considerations for Investors

• Hormel’s forward-looking statements caution about economic conditions, intangible asset risks, operational disruptions, cybersecurity, commodity price volatility, changing consumer preferences, and reputation risks.
• Investors should monitor impacts of the ongoing restructuring, commodity markets, and global expansion efforts.
• The company’s strong liquidity and conservative debt profile provide resilience, but risk factors listed in annual and quarterly reports remain relevant.

Potentially Price Sensitive Information

• Beat on Adjusted EPS: Adjusted diluted EPS growth of 8.2% versus prior year may positively influence investor sentiment.
• Guidance Update: Raised and reaffirmed earnings guidance for FY2026, which could be price sensitive and support share price.
• Divestitures and Restructuring: Portfolio optimization and restructuring plan signal focus on core growth and cost control, potentially impacting future profitability and valuation.
• Strong Cash Flow and Dividend: Robust cash flow and continued dividends reinforce shareholder value proposition.

Appendix: Non-GAAP Measures

Hormel uses several non-GAAP performance metrics to provide insights into ongoing operations, excluding one-time items such as gains/losses on asset sales, restructuring charges, and litigation settlements. See full reconciliation in the financial statement appendix for details.

Presentation and Access

• A webcast and conference call discussing these results was held on February 26, 2026, with replays available on Hormel Foods’ investor website.

Investor and Media Contacts

• Investor Relations: Florence Makope ([email protected])
• Media Relations: [email protected]