Aug 27, 2026 earnings call — Updated earnings outlook and portfolio reshaping
Company raised and narrowed fiscal 2026 adjusted earnings outlook to $1.45 to $1.51.
Revenue $3.0B (est $3.0B) · EPS $0.37 (est $0.35) · Next-quarter revenue outlook $12.1B–$12.2B
Key quotes
"We have identified opportunities to improve execution, simplify portions of our business and sharpen our allocation of resources toward higher potential growth opportunities."
"In Q3, we delivered our 12th consecutive quarter of organic net sales growth, continuing to outperform in an industry facing softer traffic trends and ongoing macro pressure."
"The inventory rebalancing actions we previously shared progressed in the third quarter, and we saw cost pressure due to the intentional lower plant utilization."
Analyst Q&A 8
Why sales guidance changed and profit drivers
Q (Benjamin Theurer · Barclays): Analyst asked what drove the revision to top-line guidance. He also asked why adjusted profit and EPS guidance improved, especially with narrowing at the high end.
A: Management said organic net sales range of 1% to 2% reflects year-to-date performance and Q4 outlook. They said weaker volumes and higher freight/fuel reduced the benefit of better COGS, but sales teams and enhanced advertising could help volumes; they expect adjusted EPS growth at or above the algorithm of plus 6% to plus 10% for the year.
"On the top line, given our year-to-date performance of plus 1% and our outlook for the fourth quarter, we think an organic net sales range of 1% to 2% is appropriate." — Jeffrey Ettinger (CEO)
How lower input costs affect margins
Q (Peter Galbo · BofA): Analyst asked whether weaker volumes delayed benefits from lower input costs and if the benefit would carry into next year. He also asked whether to expect the lower or higher end of the 1%–2% organic sales range.
A: Management said lower volumes slowed inventory turns, so they did not capture a full quarter of input-cost improvement and pork market declines began midquarter. They said the lower pork markets should help margins into upcoming quarters and into '27, though some pork and fowl headwinds remain. Management also said they are comfortable with the 1% to 2% organic sales range given foodservice momentum and work on weaker retail brands.
"You're correct in the fact that the lower volumes did obviously impact some of the inventory turns that we're going through, and we recognize that." — Paul Kuehneman (CFO)
Early views for fiscal 2027 drivers
Q (Michael Lavery · Piper Sandler): Analyst asked for early building blocks for fiscal 2027: input-cost carryover, inventory rebalancing, and anything investors might be missing. He also asked how to think about International run rate after a noisy quarter.
A: Management said their integrated planning gives earlier visibility and cited strong foodservice momentum, evolving retail strategy lifting priority brands, and favorable pork input costs that could enable investment; they noted fiscal '27 will include a 53rd week and some logistics, grain and beef cost pressures. For International, they said the quarter was noisy but trends remain intact and the main issue was SPAM export sales being impacted by an onetime legal entity transition.
"The positive side, we've got strong momentum for our foodservice segment, which we project going forward." — Paul Kuehneman (CFO)
Drivers of expected Q4 sales acceleration
Q (Thomas Palmer · JPMorgan): Analyst asked what will drive sequential acceleration to hit the 1%–2% organic sales range in Q4, and whether they are already seeing it. He also asked how sustainable the lower SG&A level is and future advertising spend.
A: Management said foodservice has delivered consistent growth and remains confident despite muted industry traffic; retail momentum comes from repositioning, marketing, digital and the private-label nut exit, which eases lapping in Q4. They said SG&A reductions implemented earlier are taking hold, some advertising was timed and lower in Q3, and they expect increased advertising in Q4 while continuing to spend wisely.
"So all in all, we feel good about the progress on retail, certainly more work to do, but we like the momentum we're seeing on key brands." — John Ghingo (CEO)
consumer pressure and capital allocation priorities
Q (Max Andrew Gumport · BNP): Analyst asked what they're seeing in the consumer environment and why they don't expect meaningful improvement in '27. He also asked about capital allocation priorities given strong balance sheet and cash.
A: Management said consumers remain strained with low sentiment driven by inflation and high fuel, though overall food demand is resilient and consumers focus on value; Hormel's portfolio and pricing/pack/positioning work aim to meet those needs, but they expect a choppy, volatile consumer backdrop. On capital allocation, they said the dividend remains a priority and they remain open to strategic partnerships or acquisitions while keeping a disciplined approach.
"The headline for me is that consumers are still feeling quite strained with low sentiment." — John Ghingo (CEO)
legal entity change and input-cost outlook
Q (Heather Jones · Heather Jones): Analyst asked whether organic volumes would have been roughly flat absent the legal entity change and whether lower input costs will be a net positive into Q4 and '25.
A: Management declined to provide specific quantification but said the majority of the decline in International tonnage is tied to the legal entity change. They also confirmed they expect lower input costs to be a net positive into Q4 and '25.
"I don't want to get into specifics, but the majority of the decline in tonnage in International is associated with the legal entity change." — Paul Kuehneman (CFO)
freight costs and inventory rebalancing effects
Q (Pooran Sharma · Stephens): Analyst asked how freight costs compare to Q2 and whether lower commodity input benefits will offset freight. He also asked what came in worse than expected on inventory rebalancing and for any quantification.
A: Management said freight and fuel remained elevated, briefly dipped, then returned to higher levels and are a year-over-year headwind reflected in guidance. They said inventory rebalancing reduced production volumes across the network, some categories were softer, turkey experienced worse feed conversion and some severe-weather power outages caused one-time costs; finished goods inventories are flat and down from last year, and most rebalancing actions occurred in Q3 with some remaining in Q4.
"freight, logistics and fuel costs continue to present those year-over-year headwinds, and those trends are reflected in the outlook." — Paul Kuehneman (CFO)
Jeff's view on key company actions
Q (Rupesh Parikh · Oppenheimer): Analyst asked Jeff for his perspective and key observations on Hormel's prospects as he departs the CEO role.
A: Jeff said the team set realistic, algorithm-rooted top-down and bottom-up plans and deployed multiple levers to improve the bottom line, including pricing, mix, efficiency gains and SG&A actions. He also said improved centralized coordination and portfolio moves like Justin's, whole-bird divestiture and Brazil changes help focus the company and reduce volatility for the future.
"Secondly, I think we were very clear about both internally and then hopefully expressed them clearly to the investment community about deploying several different levers to enhance bottom line performance." — Jeffrey Ettinger (CEO)