Abstract

Hormel plans to release quarterly results on February 26, 2026, Pre-Market, and consensus indicates modest revenue growth with pressure on margins and earnings per share relative to last year.

Market Forecast

For the current quarter, the company’s internal forecast framework indicates total revenue of $3.07 billion with an estimated year-over-year growth of 4.58%, EBIT of $237.77 million with an estimated year-over-year decline of 13.67%, and EPS of $0.32 with an estimated year-over-year decline of 15.13%; margin metrics are expected to remain constrained versus last year. The main business highlights point to retail and foodservice as the core engines, with retail revenue remaining the largest contributor and foodservice continuing to provide steady orders, while international is smaller but relevant to mix. The most promising segment by revenue scale is retail at $1.92 billion last quarter; the segment’s year-over-year growth is not provided in the data, so we focus on its revenue base and mix contribution.

Last Quarter Review

Hormel’s previous quarter delivered revenue of $3.19 billion, a gross profit margin of 14.13%, GAAP net profit attributable to the parent company of -$56.14 million, a net profit margin of -1.76%, and adjusted EPS of $0.32 with a year-over-year decline of 23.81%. The quarter-on-quarter change in GAAP net profit attributable to the parent company was -130.55%, reflecting a sharp sequential deterioration tied to mix and cost dynamics. Main business performance consisted of retail revenue at $1.92 billion, foodservice revenue at $1.09 billion, and international revenue at $174.65 million; year-over-year growth by segment is not disclosed, but retail remained the dominant contributor to sales.

Current Quarter Outlook

Retail

Retail is expected to remain the central revenue pillar this quarter, supported by stable demand across shelf-stable proteins, snacking, and convenience categories. The forecast implies overall top-line expansion, but the EPS and EBIT declines signal that retail pricing power and promotional cadence may be insufficient to offset cost pressures and potential product-mix drag. With gross margin last quarter at 14.13% and net margin negative, retail’s profitability must improve to meet investor expectations, likely depending on input-cost normalization and execution in value-added product lines. Watch for updates on pricing, elasticity, and trade spend, especially in core brands, as these will determine whether revenue growth converts into margin recovery.

Foodservice

Foodservice remains a meaningful contributor and a stabilizer for volumes, given steady orders from restaurant, hospitality, and institutional channels. The broader narrative for foodservice in the current quarter is consistent volume support with cautious margin conversion, as the EBIT forecast points to lower year-over-year profitability despite expanding revenue. Management commentary, if provided, on channel mix, contract renewals, and menu innovation will be important to assess whether the segment can offset tight margins elsewhere. We expect disciplined cost management and operational efficiency initiatives to be emphasized to underpin foodservice profitability in a softening margin environment.

International

International’s revenue base is smaller relative to domestic retail and foodservice, but it influences overall mix and profitability through export, joint ventures, and brand placement. The expected revenue growth this quarter at the consolidated level underscores potential tailwinds from selective international markets, yet the magnitude will likely be constrained by currency and logistics variability. To drive a tangible uplift, international activities would need to deliver improved margin contribution through premium SKUs or localized efficiencies, which is not explicitly indicated by the EBIT and EPS forecasts. Any commentary on regional performance and pricing strategies will provide clarity on whether international can be a lever for margin stabilization.

Stock Price Factors

The most immediate factor for the stock price is margin trajectory: with estimated EBIT down 13.67% year over year and EPS down 15.13%, investors will focus on whether cost inputs, manufacturing efficiency, and pricing actions can reverse the margin compression. Revenue growth of 4.58% sets a constructive tone, but without accompanying margin improvements, it may not lead to earnings upside. Another focus is sequential improvement from the prior quarter’s negative net margin; signs of stabilization in operating costs, freight, and commodity inputs could reset sentiment. Guidance details for fiscal timing versus calendar timing, alongside commentary on segment-level growth priorities, will shape expectations for the remainder of the fiscal year.

Analyst Opinions

Recent analyst commentary depicts a Neutral-to-Cautious stance as the majority view, emphasizing incremental revenue growth but persistent margin pressure. The core of this view is that while top-line momentum appears resilient, earnings forecasts point to a decline, suggesting that near-term profitability remains the key challenge. Analysts highlight that improved cost control and pricing discipline are necessary to change the earnings trajectory, and they will be looking for evidence of margin stabilization and operational progress in the February 26, 2026, Pre-Market release.