tapebrief
HRL · Q4 2025
HRL · Q2 2026
Preliminary brief— based on press release only. Full analysis including management tone and Q&A will be added when the transcript is available.

HRL · Q1 2026 Earnings

Hormel Foods

Reported February 26, 2026

30-second summary

Hormel reported Q1 FY2026 revenue of $3.03B (+1.3% YoY) and adjusted EPS of $0.34 — a penny below the $0.35 prior-year quarter — on organic net sales growth of +2%, the fifth consecutive quarter of organic growth. Management reaffirmed adjusted FY2026 metrics ($12.2–$12.5B revenue, $1.43–$1.51 adj. EPS, $1.06–$1.12B adj. operating income, +1–4% organic) and raised the GAAP FY2026 ranges (diluted EPS to $1.37–$1.46 from $1.29–$1.39; GAAP operating income to $1.02–$1.08B). For Q2, management framed adj. EPS as "flat to slightly up" vs. Q2 FY2025 — the most cautious near-term framing Hormel has offered, embedding a steep H2 ramp into the unchanged FY range.

Headline numbers

EPS

Q1 FY2026

$0.34

+6.3% vs est.

Revenue

Q1 FY2026

$3.03B

+1.3% YoY

-1.1% vs est.

Gross margin

Q1 FY2026

15.5%

Free cash flow

Q1 FY2026

$0.28B

Operating margin

Q1 FY2026

8.0%

Key financials

Q1 FY2026
MetricQ1 FY2026YoYQ4 FY2025QoQ
Revenue$3.03B+1.3%$3.20B-5.4%
EPS$0.34—$0.32+6.3%
Gross margin15.5%—14.0%+150bps
Operating margin8.0%—0.1%+790bps
Free cash flow$0.28B—$0.23B+20.7%

Guidance

Management reaffirmed full-year FY2026 guidance ($12.2-$12.5B revenue, $1.43-$1.51 EPS) despite Q1 revenue miss of ~4%, signaling confidence in back-half recovery; however, Q2 EPS outlook of flat-to-slightly-up YoY indicates near-term momentum remains muted.

Guidance is issued for both next quarter and the full year. Both may appear below.

Actuals vs prior guidance

MetricPeriodPrior guideActualΔResult
RevenueQ1 FY2026$3.15 - $3.25 billion$3.027 billion-$0.123 billion below guide (3.8% miss vs midpoint)Missed
Adjusted Diluted EPSQ1 FY2026$0.38 - $0.40$0.34-$0.05 below guide midpoint, but beat consensus estimate of $0.32 by 6.3%Beat
Organic Net Sales GrowthQ1 FY20261% - 4%2%in-line (at midpoint of range)Met

New guidance

MetricPeriodGuideYoY
Adjusted Diluted EPSQ2 FY2026flat to slightly up YoYflat to +low single digits % YoY

Reaffirmed unchanged this quarter: Revenue ($12.2 - $12.5 billion), Adjusted Diluted EPS ($1.43 - $1.51), Adjusted Operating Income ($1.06 - $1.12 billion), Organic Net Sales Growth (1% - 4%)

Segment performance

Q1 FY2026
SegmentQ1 FY2026YoY
Retail$1.848B-2.2%
Foodservice$0.998B+7.3%
International$0.181B+7.6%
Foodservice Organic Net Sales Growth7%—
International Organic Net Sales Growth8%—
Retail Organic Net Sales Growth-2%—

Platform metrics

Q1 FY2026
SegmentQ1 FY2026
Organic Net Sales Growth2%
Foodservice Consecutive Quarters Organic Growth10 consecutive quarters

Profitability

Q1 FY2026
SegmentQ1 FY2026
Adjusted Operating Margin8.2%
Cash Flow from Operations$349 million
Effective Tax Rate22.4%

Management tone

The pricing narrative has shifted from "pass-through" to "closing the gap between profitability and top-line growth." Management's language this quarter is more candid: "pricing actions that are helping to close the gap between profitability and top-line growth." That phrasing concedes pricing is now defensive — protecting the spread rather than driving incremental margin — and helps explain why Retail revenue declined 2.2% even as organic ran -2%.

Logistics emerged as a new, unquantified headwind with uncertain duration. Management framed it as "unexpected increases in logistics expenses" tied to "freight capacity tightening driven by severe winter weather," with the explicit caveat that "it's kind of too early to tell whether they're a seasonal issue or whether there's something that will be with us for more of the year." A new headwind introduced in Q1 with unknown duration, against an unchanged adjusted FY guide, is the tension to watch.

The retail framing has flipped from "core growth engine" to "restructuring focus." Retail revenue declined 2.2%, management cited "the strategic exit from select non-core private label snack nut items," and the prepared commentary now frames "revitalizing the retail segment" as a major focus with "meaningful strategic actions underway." The segment that was supposed to lead is now the segment being fixed.

Vertical integration in protein is being unwound where it touches commodity volatility. The whole-bird turkey divestiture was framed as supporting the goal of "reducing our exposure to volatile commodity-driven businesses and sharpening our focus on our value-added protein portfolio." Hormel is narrowing its definition of what it owns to value-added only, accepting a smaller footprint in exchange for less commodity exposure.

Bottom-line acknowledgment that profit has not recovered. Management noted "adjusted EPS was still a penny below last year" despite five consecutive quarters of organic sales growth. The "flat to slightly up" Q2 guide is the operational expression of that admission.

Recurring themes management leaned on this quarter:

Protein-centric portfolio positioning as strategic advantageSequential margin recovery through pricing, SG&A savings, and Transform & ModernizeRetail segment stabilization and selective portfolio rationalizationCommodity cost headwinds persisting (beef, pork trim, nuts) requiring pricing pass-throughUnexpected logistics cost inflation emerging as Q1 headwindLeadership team refresh with external hires to accelerate capabilities

Risks management surfaced:

Beef costs remain high and expected to be headwind throughout fiscal 2026Freight capacity tightening and elevated logistics expenses may persistRetail elasticity from pricing actions reducing volumesChallenging consumer environment with limited retail consumption growthFood service traffic headwinds despite strong Hormel performance

Answers to last quarter's watch list

The "holistic 2026" framework — quantitative EPS range or qualitative algorithm? Management held a quantitative adjusted FY2026 range ($1.43–$1.51 adj. EPS, $12.2–$12.5B revenue) and reaffirmed it this quarter, while also raising the GAAP FY EPS range to $1.37–$1.46. The dollar anchor is intact. Status: Resolved positively
Q1 FY2026 commodity environment vs. "pressures persist into next year." Commodity pressures are confirmed persistent — beef remains high through FY2026, pork trim elevated (+12% YoY), nuts still pressured — and management now expects only "modest improvement" in the back half rather than full relief. A new logistics headwind compounds the picture. Status: Resolved negatively
T&M dollar disclosure for FY2026. The press release and prepared commentary referenced T&M as a contributor to the reaffirmed FY range but did not disclose a specific FY2026 dollar benefit range. The program appears to have shifted from a quantified annual commitment to a qualitative margin lever. Status: Resolved negatively (no quantified anchor)
Foodservice organic volume — acceleration or stall? Foodservice organic net sales grew +7% in Q1 (reported +7.3%), marking 10 consecutive quarters of organic growth. Organic volume was flat — net sales growth was price/mix-led. Status: Resolved positively on sales, mixed on volume
Planters profit growth vs. revenue growth. Planters delivered consumption and net sales growth in Q1, but Retail segment profit fell 19%; management didn't disclose Planters-specific profit dynamics. Status: Continue monitoring

What to watch into next quarter

Q2 FY2026 adj. EPS landing flat to slightly up vs. the prior-year base — a miss off this already-cautious guide would force a second FY range reset.

Whether the logistics cost pressure persists past Q2 or proves "seasonal" as management hopes. A sustained logistics drag would consume the back-half commodity easing that anchors the reaffirmed FY range.

Retail organic net sales returning to flat or positive. Two consecutive quarters at -2% organic would pressure the reaffirmed +1% to +4% FY organic guide regardless of Foodservice strength.

H2 FY2026 EPS run-rate required to hit reaffirmed adj. FY $1.43–$1.51: roughly $0.75–$0.83 against an H1 base of ~$0.68. Watch whether Q3 prints above $0.37 to keep the FY range mathematically achievable without an outsized Q4.

Foodservice organic growth holding at or above +7%. The 10-quarter streak is the only structural margin lever fully working; any deceleration removes the offset to Retail weakness.

Any further portfolio divestiture announcements beyond whole-bird turkey. Management's "advantaged protein-centric portfolio" language combined with the turkey exit suggests more commodity-exposed pieces may be on the block.

Sources

  1. Hormel Foods Q1 FY2026 Earnings Release (SEC filing): https://www.sec.gov/Archives/edgar/data/48465/000004846526000018/hormelearningsreleaseq12026.htm
  2. Hormel Foods Q1 FY2026 earnings conference call prepared remarks and Q&A (Feb. 26, 2026)

Get the next brief, free.

We publish analyst-grade earnings briefs the same day or morning after every call — headline numbers, segment KPIs, Q&A highlights, and tone analysis. Free during beta.

This is not investment advice.