MW Beef and nut prices have surged - and that's driving Hormel's stock to its biggest drop ever

By Steve Gelsi

The parent of Spam and Planters brands said beef, pork and nut markets have 'worsened significantly beyond our projection'

Spam and Skippy maker Hormel warned of a fiscal fourth-quarter profit shortfall on rising input costs for meat and other commodities.

Hormel Foods Corp.'s stock could see the steepest one-day loss in its trading history on Thursday after the maker of Spam, Planters nuts and Jennie-O turkey slashed its profit outlook due to higher-than-expected costs for meat and nuts.

Hormel's stock $(HRL)$ was down 13.5% to $25.11 a share, which will mark its lowest finish in about 10 years if the losses hold through the close, according to Dow Jones Market Data.

Hormel said it's taking "targeted pricing actions" in the face of beef, pork and nut markets that have "worsened significantly beyond our projection."

For example, the price of pork bellies - the underside of the animal used to make bacon - rose 30%, the company said.

Beef prices, which have posed a challenge due to lower supply, are "a persistent inflationary headwind industry-wide and near [an] all-time high," Chief Financial Officer Jacinth Smiley said on a conference call Thursday following the company's quarterly earnings report, according to a transcript.

Hormel warned it now expects fiscal fourth-quarter earnings of 38 cents to 40 cents a share, which is below the FactSet consensus estimate of 47 cents a share.

Hormel's third-quarter profit rose to $183.74 million, or 33 cents a share, from $176.7 million, or 32 cents a share, in the year-ago quarter.

Its adjusted third-quarter earnings of 35 cents a share missed the FactSet consensus estimate of 40 cents a share. The company said the result was disappointing and fell short of its own expectations.

Revenue rose 5% to $3.03 billion, coming in ahead of the Wall Street consensus estimate of $2.98 billion.

Hormel said its results included "strong organic volume and net sales performance" despite headwinds on its profit.

Jennie-O turkey "delivered another impressive quarter" due to consumer demand and improved distribution, the company said.

Hormel also invested in Spam by launching singles portions in flavors including bacon and hot and spicy.

In its food-service unit, Hormel's premium pepperoni increased volume by more than 20%, but industrywide traffic was down in that sector.

Hormel said its efforts to improve performance at its Planters nut business were resulting in higher sales, but profitability has lagged expectations.

But the biggest factor in the company's profit weakness was rising input prices.

"That run-up in commodity markets was both sudden, and it was major, as it occurred across inputs that are major for our business," said Jeff Ettinger, Hormel's interim chief executive.

Also read: Tyson's beef business facing 'the most challenging market conditions' it has ever seen

-Steve Gelsi

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August 28, 2025 14:22 ET (18:22 GMT)

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