Hormel Foods Corporation

Several pork producers have agreed to a $117 million class action settlement to resolve claims they conspired to limit the supply of pork and increase prices in the market. The lawsuit alleges the pork processors inflated and stabilized the price and supply of pork through the use of Agri Stats, production restraints and the use of exports. The companies implicated include Agri Stats, Clemens, Hormel, Seaboard, Triumph, Tyson and Smithfield, among others, and the court has not ruled that the defendants did anything wrong, with the companies denying any allegations of wrongdoing. Consumers who indirectly purchased raw pork bacon or fresh or frozen pork made from bellies, loins, shoulders, ribs or pork chops from one of the companies in 23 states and the District of Columbia between June 28, 2014 and June 30, 2018 may be eligible for a cash payment, though the amount each class member will receive is unknown and will depend on factors including the number of timely and valid claim forms filed. Claims must be filed by Oct. 29, 2026.

The Consumer Staples Select Sector SPDR Fund ended August roughly flat, slipping about 0.08% for the month, a muted headline number that obscured double-digit swings in individual names. Hormel Foods and Tyson Foods led the sector's losses after cutting sales outlooks even as they posted profit beats, while Estée Lauder, General Mills, and Bunge Global posted double-digit gains on improving results and upgraded forecasts. Hormel fell about 12% after reporting fiscal third-quarter adjusted earnings of 37 cents per share, beating estimates by 2 cents, but organic net sales fell 2% as commodity turkey and bacon and a strategic exit from certain private-label snack-nut items weighed on the top line; the company raised its adjusted EPS outlook for fiscal 2026 to $1.45-$1.51 from $1.43-$1.51, while cutting its net sales forecast to $12.1 billion-$12.2 billion from $12.2 billion-$12.5 billion. Tyson dropped about 8% after its fiscal third-quarter adjusted EPS rose 9% to 99 cents, with sales roughly flat at $13.87 billion, as its beef segment posted an operating loss of $138 million on constrained cattle supplies and higher input costs, prompting the company to widen its full-year beef loss forecast. Estée Lauder rose about 17% after reporting fiscal fourth-quarter net sales up 6% to $3.63 billion and adjusted EPS of 39 cents, and raising its fiscal 2027 adjusted operating-margin outlook to 12.7%-13.5% from 12.5%-13.0%. General Mills gained about 14% on a fiscal 2027 outlook centered on improved organic net sales growth and at least $750 million in cost savings, while Bunge rose about 13% after raising its full-year adjusted EPS outlook to $9.25-$9.75 from $9.00-$9.50.

Hormel Foods shares fell 9.3% in afternoon trading after the company cut its full-year sales forecast and reported second-quarter revenue that missed Wall Street expectations due to pressured consumer demand. The packaged foods company reported a 2.4% year-over-year drop in second-quarter revenue to $2.96 billion, falling short of the $3.04 billion estimate, as total sales volumes declined 7.4%. Sales in its largest segment, retail, fell 4% on a 9% volume decline amid softer demand for private-label snack nuts. Hormel lowered its full-year net sales guidance to between $12.1 billion and $12.2 billion, down from its prior range of $12.2 billion to $12.5 billion, and narrowed its expected full-year organic sales growth to 1% to 2%. While quarterly adjusted earnings of $0.37 per share topped analyst projections of $0.35, the reduced outlook and persistent consumer headwinds weighed on sentiment.

Nvidia surged 9% after second-quarter revenue and earnings beat expectations, with adjusted earnings of $2.22 per share on $96.22 billion in revenue, surpassing analyst estimates of $2.10 per share and $92.17 billion, and the company forecast third-quarter revenue of $108 billion. Salesforce soared 21% after adjusted earnings of $5.90 per share beat an LSEG estimate of $3.27, while Okta jumped over 27% on better-than-expected results and raised guidance. Veeva Systems climbed 16% on strong quarterly results and upbeat guidance, but HP fell 4% despite beating revenue estimates due to concerns over memory costs and margins. Moderna dropped 4% after proposing a $2 billion convertible notes sale, Celsius fell nearly 6% on a Deutsche Bank downgrade, and Wendy's tumbled 13% after reports that Trian Fund Management won't pursue a buyout. Dollar General rose 5% after raising full-year guidance, while Dollar Tree, Burlington Stores, Best Buy, and Hormel Foods declined on various earnings-related concerns.

Hormel Foods reported third-quarter revenue of $2.96 billion, down 2.4% year over year, and earnings per share of $0.37, up from $0.35 a year ago. The revenue fell short of the Zacks Consensus Estimate of $3.05 billion by 2.81%, while EPS beat the consensus estimate of $0.36 by 2.78%. Among its segments, Retail sales declined 4.3% to $1.78 billion, International sales fell 4.7% to $178.74 million, and Foodservice sales rose 1.6% to $1 billion. Segment profits were mixed, with Foodservice profit at $144.48 million, Retail profit at $118.07 million, and International segment profit at a loss of $29.23 million. Hormel shares have dropped 8.1% over the past month, and the stock carries a Zacks Rank of 4, indicating potential underperformance.

Hormel Foods is flagged for underperformance due to three key concerns. Average quarterly sales volumes have shrunk by 3.1% over the last two years, signaling slipping demand. The company's gross margin averaged just 16.2% over the same period, indicating weak pricing power and high costs. Additionally, earnings per share declined by 6.2% annually over the past three years despite flat revenue, reflecting struggles with fixed costs amid choppy demand. The stock trades at 17 times forward earnings, or $26.16 per share, but the analysis suggests better opportunities exist elsewhere.

Hormel Foods Corporation shares have underperformed the Dow Jones Industrial Average over both the past three months and the past 52 weeks. The stock is down 22.8% from its 52-week high of $31.86 reached on July 10, 2025, and has declined 18.2% over the past year, while the Dow gained 23.2% in the same period. Over the past three months, Hormel rose 7.3%, trailing the Dow's 10.7% advance. The company reported second-quarter 2026 revenue of $3 billion and adjusted earnings per share of $0.40, both exceeding Wall Street estimates, and expects full-year earnings of $1.28 to $1.37 per share on revenue of $12.2 billion to $12.5 billion. Analysts hold a consensus 'Hold' rating on the stock with a mean price target of $26.29, implying a 6.2% upside from current levels.