Hormel Foods Corporation

Hormel Foods is expected to report growth in both revenue and earnings when it releases third-quarter fiscal 2026 results on Aug. 27. The Zacks Consensus Estimate for revenues is $3.05 billion, up 0.5% from the prior-year quarter, while the consensus earnings estimate of 36 cents per share implies a 2.9% increase. The company has a trailing four-quarter earnings surprise of 3.2% on average. Strength in its protein-focused portfolio, including Jennie-O ground turkey, Applegate, and Hormel Black Label bacon, along with pricing actions and improving turkey manufacturing performance, likely supported results. However, pressures from cautious consumers, weakness in higher-priced nuts, elevated fuel and logistics costs, volatile pork and beef inputs, and inventory rebalancing in ambient products may have limited earnings growth.

Shelf-stable food stocks reported mixed first-quarter results, with revenues in line with analysts' consensus estimates but next quarter's revenue guidance coming in 11.6% below expectations. Hormel Foods posted revenues of $2.97 billion, up 2.5% year on year, matching expectations and delivering strong beats on EBITDA and gross margin estimates. Hershey outperformed with revenues of $3.10 billion, up 10.6% year on year, exceeding expectations by 2.4% and beating EBITDA and organic revenue estimates. BellRing Brands was the weakest performer, with revenues of $598.7 million, up 1.8% year on year, missing expectations by 1.7% and issuing full-year EBITDA guidance significantly below estimates. B&G Foods topped expectations by 2.4% with revenues of $408.9 million, down 3.9% year on year, and achieved the highest full-year guidance raise among its peers. Campbell's missed expectations by 0.6% with revenues of $2.37 billion, down 4.4% year on year, in a mixed quarter that included a narrow EBITDA beat.

Hormel Foods Corporation reported strong second-quarter results on May 28, with net sales up 3% to $2.97 billion and adjusted earnings per share of $0.40. The company achieved its sixth consecutive quarter of organic top-line growth and double-digit adjusted earnings growth. Hormel reaffirmed its full-year adjusted diluted earnings per share guidance of $1.43 to $1.51, reflecting growth of 4% to 10%, and expects net sales between $12.2 billion and $12.5 billion. The quarter also saw the completion of the divestiture of its whole-bird turkey business, aligning with a strategic shift toward value-added proteins.

Hormel Foods has reached a deal to sell its Brazilian operations, which operate under the Ceratti brand, to Zanchetta Alimentos, another food maker in the country. Financial details were not disclosed. The divestiture reflects Hormel's efforts to simplify its portfolio and focus international strategy on markets with the strongest long-term growth opportunities. The transaction is expected to close in the coming weeks following regulatory approval. Hormel's international business makes up a small portion of its sales, and the Brazil market had been a drag on performance, with interim CEO Jeffrey Ettinger calling it 'challenged' in December 2025.

Hormel Foods has returned 9.8% year-to-date, outperforming the average 8.2% gain of the Consumer Staples sector, which comprises 173 stocks and ranks 15th out of 16 Zacks sectors. The company holds a Zacks Rank of 2, or Buy, and its full-year earnings consensus estimate has risen 4.6% over the past quarter. Within its Food - Meat Products industry, which has lost an average of 2.5% this year, Hormel's performance is notably stronger. Kenvue, another Consumer Staples stock, has returned 9.9% year-to-date and also carries a Zacks Rank of 2, with its current-year EPS estimate up 5.3% over three months.

Hormel Foods President John Ghingo says protein demand is in a 'frenzy' right now, but the trend is a long-term one that has endured for over 25 years. Consumers now associate protein with satiety, weight management, healthy aging, and bone health, beyond just muscle building. Hormel's portfolio includes meat, poultry, pork, beef, nuts, and nut butters, allowing it to meet demand across all dayparts, including a fast-growing snacking segment where people want more substance. Ghingo notes that consumers are shifting toward more mini meals or fuel stops during the day, seeking snacks like nuts, nut butters, meats, and cheeses rather than traditional treats like cookies and chips. He also highlights that the growing GLP-1 drug user community relies on protein as a critical part of their diet.

Five Dividend Kings—companies with 50 or more consecutive years of dividend increases—offer retirees dependable income and stability as markets rotate away from volatile tech names. Altria yields 5.9% after its 57th consecutive dividend hike, while Kimberly-Clark pays nearly 5% after its shares fell 23% in 2025. Hormel Foods offers a 4.77% yield and is restructuring to cut costs, Sonoco Products pays 4.20% and makes constantly in-demand packaging, and Genuine Parts has raised its dividend for 69 consecutive years, trades at just 12 times forward earnings, and holds a Raymond James Strong Buy rating.

Hormel Foods' 4.79% dividend yield and 60-year streak of increases remain secure, supported by recovering free cash flow and a strong balance sheet, even though the stock trades 22.8% below its 52-week high. GAAP earnings were distorted by a $234 million non-cash impairment and a $61 million whole-bird turkey divestiture loss, pushing the trailing GAAP payout ratio to 132.4%, but the adjusted EPS payout ratio was approximately 81% and the five-year average free cash flow payout ratio was a healthy 77.7%. Operating cash flow surged 217% in the second quarter of fiscal 2026 to $178.9 million, and cash on hand grew 23.45% year over year to $826.75 million. Five directors, including Chairman William Newlands, bought shares at $22.65 on March 31, 2026, signaling insider conviction, while CEO Jeff Ettinger expressed confidence in delivering the full-year outlook.

BofA and Stephens both raised their price targets on Hormel Foods to $25 following the company's second-quarter adjusted earnings beat. BofA increased its target from $23 while maintaining a Neutral rating, noting the stock's reaction was largely relief-driven and that investors were encouraged by the company's decision not to cut guidance. Stephens raised its target from $22 with an Equal Weight rating, but said it would prefer to see a guidance increase or clearer path to second-half improvement before becoming more constructive.

Consumer stocks have suffered deep drawdowns in 2026, creating attractive entry points for long-term investors. The average S&P 500 stock has seen a maximum drawdown of 21% this year, with a meaningful portion of that damage landing on consumer names unrelated to AI spending or geopolitical conflict. J.M. Smucker reported fiscal fourth-quarter net sales up 6% to $2.3 billion and adjusted earnings per share up 20%, while its Uncrustables brand crossed $1 billion in annual sales. Tyson Foods beat earnings estimates in its fiscal second quarter, posting $0.87 per share against an expectation of $0.78, and raised its full-year chicken segment income forecast to as much as $2.05 billion. Hormel Foods, trading near multiyear lows at roughly 15.5 times earnings compared with a 10-year average of closer to 19 times, offers a nearly 4.8% dividend yield and has raised its dividend for more than 25 consecutive years.