Hormel Foods’ third quarter saw a positive market reaction despite revenue falling below Wall Street’s expectations, as investors focused on the company’s stronger than anticipated non-GAAP profit. Management highlighted persistent input cost inflation, particularly in pork and beef, as a major headwind, which weighed on margins and sales volumes. Interim CFO Paul Keenan acknowledged, “Profit was challenged this year, and value-added growth was more than offset by year-over-year margin pressures related to higher commodity input costs, supply chain impacts of avian illnesses, and some discrete items.” The company’s protein-forward brands like Jennie-O and Planters provided some stability, but discrete events including a product recall and facility fire further pressured results.
Is now the time to buy HRL? Find out in our full research report (it’s free for active Edge members).
Hormel Foods (HRL) Q3 CY2025 Highlights:
- Revenue: $3.19 billion vs analyst estimates of $3.25 billion (1.5% year-on-year growth, 2% miss)
- Adjusted EPS: $0.32 vs analyst estimates of $0.30 (6% beat)
- Adjusted EBITDA: $316.8 million vs analyst estimates of $293.2 million (9.9% margin, 8.1% beat)
- Adjusted EPS guidance for the upcoming financial year 2026 is $1.47 at the midpoint, beating analyst estimates by 2.1%
- Operating Margin: 0.1%, down from 9.4% in the same quarter last year
- Sales Volumes fell 1.8% year on year (-4.1% in the same quarter last year)
- Market Capitalization: $13.06 billion
While we enjoy listening to the management's commentary, our favorite part of earnings calls are the analyst questions. Those are unscripted and can often highlight topics that management teams would rather avoid or topics where the answer is complicated. Here is what has caught our attention.
Our Top 5 Analyst Questions From Hormel Foods’s Q3 Earnings Call
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Michael Lavery (Piper Sandler) asked for details on the puts and takes behind 2026 guidance. CEO Jeff Ettinger explained that enhanced marketing support, continued cost savings, and pork cost relief should aid results, but Q1 will remain pressured due to lingering cost impacts.
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Tom Palmer (JPMorgan) sought clarification on turkey market assumptions and restructuring savings. President John Ghingo noted ongoing volatility in turkey pricing and supply, while Ettinger explained that restructuring savings will be partially reinvested, with benefits ramping up as the year progresses.
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Ben Theurer (Barclays) questioned the Planters brand’s distribution recovery and international strategy. Ghingo confirmed Planters has nearly regained previous shelf space, while further portfolio review—especially in Brazil—remains underway.
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Heather Jones (Heather Jones Research) requested specifics on raw material cost trends and consumer demand assumptions. CFO Keenan said pork input relief is anticipated in the second half of the year, but consumer behavior is expected to remain value-focused and cautious in 2026.
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Leah Jordan (Goldman Sachs) asked about the mix of price versus volume in segment growth and the competitive retail landscape. Keenan forecasted modest volume declines in retail with most growth from pricing, while Ghingo highlighted continued investment in brand support to maintain momentum.
Catalysts in Upcoming Quarters
In the quarters ahead, the StockStory team will monitor (1) the effectiveness of Hormel’s pricing actions in offsetting stubborn input cost inflation, (2) the pace and impact of restructuring savings and reinvestment into key brands, and (3) signs of sustained volume growth, especially in retail and international segments. Progress on portfolio simplification and expansion of value-added protein products will also be important indicators of future performance.
Hormel Foods currently trades at $23.77, up from $23.43 just before the earnings. In the wake of this quarter, is it a buy or sell? The answer lies in our full research report (it’s free for active Edge members).
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