Hormel Foods Corporation

Q3 performance: solid earnings growth, softer top line - Adjusted EPS $0.37, +6% YoY; adjusted operating margin 9%, +60 bps YoY. - Organic net sales -2% YoY (top-line pressure from portfolio shaping, softer commodity markets, and a challenged consumer environment). - Gross profit $472M, gross margin 15.9%; short-term margin impacted by lower volumes and some operational inefficiencies.

Full-year outlook raised (earnings up; sales growth expectation tightened) - Adjusted earnings outlook raised and narrowed: $1.45 to $1.51 (prior $1.43 to $1.51). - Management reiterates confidence in delivering FY26 adjusted earnings growth of ~6% to 10% YoY (implied by updated range) consistent with/above long-term algorithm. - Organic net sales guidance tightened: now +1% to +2% (from prior +1% to +4%), reflecting current market/consumer conditions. - Key message for investors: bottom-line improvements are expected to outpace top-line, aided by margin actions and cost management, even with modest sales growth.

Segment dynamics: Foodservice strong; Retail mixed; International noisy - Foodservice: 12th consecutive quarter of organic net sales growth; growth broad-based and supported by premium prepared proteins and branded pepperoni; profitability improved via mix management and operator-focused model. - Retail: expected “noisier” back half, but volume weakness worse than initially expected; impacted by divestitures/exits (whole-bird turkey, private label snack-nuts) plus pricing elasticity and some additional softness. - Offsets: priority brands showing momentum incl. Jennie-O ground turkey, Applegate, Hormel chili + Refrigerated Entrees, Planters (supported by in-store activations and marketing shifts). - International: multiple one-time/structural items affected reported results: - Brazil operations sale → loss recorded; Brazil excluded from organic comparisons going forward. - Indonesia impairment (minority investment). - SPAM export sales disrupted by one-time legal entity transition. - Management says long-term International demand remains resilient despite “noisy” quarter.