Hormel Foods Corp. experienced a decline in volume in its Retail operating unit for the third consecutive quarter, impacting its fiscal third-quarter results. John Ghingo, president and CEO-elect of Hormel, attributed this decline to the divestiture of the whole bird turkey business and the exit from certain private label snack nut products. Additionally, pricing elasticities and a challenging consumer environment contributed to the decrease in volume.
Ghingo noted that the consumer environment remains challenging, with low sentiment and the cumulative effects of inflation and high fuel prices adding to consumer strain. Despite these challenges, Hormel reported a net earnings decrease to $59.6 million for the third quarter, with net sales falling to $2.96 billion.
Overall, Hormel’s volume declined by 7% across its three operating units. Retail volume dropped by 9%, leading to a decline in net sales and profit. However, Ghingo highlighted the success of the company’s priority brands, such as Jennie-O ground turkey, Applegate, Hormel chili, and refrigerated entrees, which saw net sales growth.
In the Foodservice segment, volume fell slightly, but net sales increased, driven by premium prepared proteins and branded pepperoni. The International unit experienced the biggest decrease in volume, leading to a loss attributed to various factors, including the sale of operations in Brazil.
Looking ahead, Hormel adjusted its outlook for fiscal 2026, with expectations of net sales in the range of $12.1 billion to $12.2 billion and adjusted operating income and earnings per share growth of 6% to 10% year over year. The company remains focused on strengthening its offerings and driving growth in its key brands.