Hormel Foods cuts sales outlook as Q3 revenue misses, EPS beats

The quarter was a modest earnings beat but a clear top-line miss. Adjusted diluted EPS came in at $0.37 versus published consensus around $0.35, while revenue was $2.96 billion versus roughly $3.03 billion expected. The sales shortfall matters because organic net sales fell 1.7% year over year, with total volume down 7.1% on an organic basis. (Organic net sales and volume tables) 〔0〕

Foodservice remains the dependable offset, not a broad recovery. Foodservice organic sales increased 1.8% and segment profit rose 2.7%, but Retail organic sales fell 3.3% and International organic sales declined 4.4%. (Segment results — Foodservice, Retail and International) The underlying mix is therefore uneven: Foodservice is growing, while the larger Retail business is losing volume and sales.

The headline earnings beat is heavily helped by items excluded from adjusted results. GAAP EPS collapsed to $0.11 from $0.33, reflecting a $56 million Brazil divestiture loss, a $48 million Indonesia investment impairment and a $38 million litigation settlement. (Non-GAAP reconciliation) Adjusted operating income still grew 4.7%, but adjusted operating margin expanded only to 9.0% from 8.4%, leaving the core improvement positive but limited.

The outlook is mixed rather than upgraded across the board. Adjusted EPS guidance rose to $1.45–$1.51 from $1.43–$1.51, but the sales range was cut to $12.1–$12.2 billion from $12.2–$12.5 billion, and organic sales growth was reduced to 1%–2% from 1%–4%. (Fiscal 2026 outlook) Management said it was "raising and narrowing" adjusted earnings expectations. 〔1〕 Net: the EPS beat and higher adjusted EPS floor offset some concern, but weaker demand, falling volumes and the sales-guide cut keep this closer to in line than a clean beat.