- Net Sales Growth: Exceeded $12 billion with 2% organic growth in fiscal 2025.
- Operating Income: Operating income at $719 million vs. adjusted operating income of $1.01 billion.
- Dividend Increase: 1% raise to quarterly dividend, 60th consecutive year of increases (annualized $1.17/share in 2026).
- 2026 Guidance: Organic net sales growth of 1–4% and adjusted operating income growth of 4–10%.
- Restructuring Benefits: $20–25 million cost to implement, with $60–$90 million in savings (up to $30 million to bottom line).
Guidance and Outlook for Fiscal 2026
The company expects to build on its top-line strength in 2026, with a focus on winning in attractive consumption spaces and positioning its brands and innovation for growth. Hormel Foods expects organic net sales growth of 1% to 4% and adjusted operating income growth of 4% to 10% in fiscal 2026. The guidance includes assumptions such as pork input costs declining compared to fiscal 2025, but beef and nut costs remaining high. Analysts estimate next year's revenue growth at 1.8%, which is within the company's guidance range.
Valuation and Dividend Yield
With a P/E Ratio of 28.02 and a Dividend Yield of 4.77%, Hormel Foods Corporation is offering a relatively attractive yield to investors. The company's P/B Ratio is 1.18, indicating a reasonable valuation. The EV/EBITDA ratio is 15.49, which is a moderate valuation multiple. The company's strong financial position, ample liquidity, and conservative level of debt support its ability to continue delivering value to shareholders.
Segment Performance and Expectations
The company expects each of its segments to deliver both top-line and segment profit growth in fiscal 2026. Retail is expected to have modest declines in volume with low single-digit increases in net sales, while foodservice expects low single-digit increases in volume with net sales in the mid-single digits. International expects low single-digit increases in volume with high single-digit increases in net sales. The company is focusing on fueling trends, becoming future-ready, and portfolio reshaping to drive growth.
Raw Material Input Costs and Tariffs
Pork, shrimp, and beef remain a headwind year over year, but the company expects year-over-year relief in bellies and improved pork benefits in the second half of 2026. The company feels fairly insulated from tariffs and expects $25 to $35 million in tariff expenses in 2026, mainly related to steel and aluminum supplies. The cost to implement changes is estimated to be $20-25 million, which could lead to $60 million in savings.
Transformation and Modernization Efforts
The company has taken steps to help its bottom-line performance catch up with its top-line momentum, including pricing flow-through, mix improvement, and benefits from the transform and modernize program. The company expects to see financial benefits in 2026 from its transformation and marketing expenses, although it did not provide a breakout for 2026. The expected gross margin expansion driven by mix improvements, pricing benefits, and productivity from the transform and modernize initiative is a positive sign for the company's profitability.