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1. Company Snapshot

1.a. Company Description

Hormel Foods Corporation develops, processes, and distributes various meat, nuts, and food products to retail, foodservice, deli, and commercial customers in the United States and internationally.The company operates through four segments: Grocery Products, Refrigerated Foods, Jennie-O Turkey Store, and International & Other.It provides various perishable products that include fresh meats, frozen items, refrigerated meal solutions, sausages, hams, guacamoles, and bacons; and shelf-stable products comprising canned luncheon meats, nut butters, snack nuts, chilies, shelf-stable microwaveable meals, hashes, stews, tortillas, salsas, tortilla chips, and others.


The company also engages in the processing, marketing, and sale of branded and unbranded pork, beef, poultry, and turkey products, as well as offers nutritional food products and supplements, desserts and drink mixes, and industrial gelatin products.It sells its products primarily under the SKIPPY, SPAM, Hormel, Natural Choice, Applegate, Justin's, Jennie-O, Café H, Herdez, Black Label, Sadler's, Columbus, Gatherings, Herdez, Wholly, Columbus, Planters, NUT-rition, Planters Cheez Balls, Corn Nuts, etc.brand names through sales personnel, independent brokers, and distributors.


The company was formerly known as Geo.A.Hormel & Company and changed its name to Hormel Foods Corporation in January 1995.


Hormel Foods Corporation was founded in 1891 and is headquartered in Austin, Minnesota.

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1.b. Last Insights on HRL

Hormel Foods Corporation faces challenges, including investigations by law firms Levi & Korsinsky and Rosen Law Firm regarding potential securities claims. The company cut its forecast due to price pressure and a weak consumer backdrop. Additionally, Hormel reported Q4 earnings exceeding $12 billion in net sales, representing 2% organic growth. However, operating income was $719 million, with adjusted operating income over $1 billion. The company also faces rising input costs and slow pricing recovery, threatening near-term margins. A Hold rating is warranted pending evidence of sustained profit and cash flow improvement.

1.c. Company Highlights

2. Hormel Foods' Q1 Earnings: A Mixed Bag with Promising Segments

Hormel Foods reported a 2% organic net sales growth in Q1 FY2026, marking its fifth consecutive quarter of growth, with adjusted diluted earnings per share (EPS) of $0.34, beating estimates of $0.32. Net sales reached just over $3 billion. However, gross profit was hampered by higher input costs and logistics expenses, resulting in an adjusted operating margin of 8.2%. The company's financial performance was a mixed bag, with the Foodservice and International segments driving growth, while the Retail segment declined.

Publication Date: Mar -01

📋 Highlights
  • Organic Net Sales Growth:: Achieved 2% organic net sales growth in Q1, marking the fifth consecutive quarter of growth, driven by Foodservice and International segments with high single-digit increases.
  • Adjusted EPS Performance:: Adjusted diluted earnings per share were $0.34, with full-year guidance maintained at $1.43–$1.51 per share, reflecting confidence in sequential improvement.
  • Sales Segment Highlights:: Foodservice segment delivered 7% organic net sales growth, while Retail saw a 2% decline due to strategic exits of private-label nut products and SKIPPY softness.
  • Commodity Cost Headwinds:: Higher input costs (beef, pork, nuts) and logistics expenses pressured gross profit, though modest improvements are expected in H2 FY2026.
  • CapEx and Liquidity:: Cash flow from operations rose to $349 million, and capital expenditures totaled $69 million, focusing on China’s ambient meat snack facility and tech investments.

Segment Performance: Foodservice Shines, Retail Stumbles

The Foodservice segment saw a 7% organic net sales growth, driven by a differentiated advantage model and pricing actions. The company's Foodservice business saw a 7% net sales growth, with flat volumes due to price increases. In contrast, the Retail segment's net sales performance was down 2% in the quarter, driven by a strategic exit of certain private label nut items. However, priority brands like Planters, Hormel Gatherings, and Applegate showed volume growth, with dollar consumption growth of 3%.

Guidance and Outlook: Steady Progress Expected

Hormel Foods reiterated its adjusted full-year FY2026 guidance, expecting organic net sales growth of 1% to 4%, adjusted operating income growth of 4% to 10%, and adjusted diluted EPS to be in the range of $1.43 to $1.51 per share. The company expects sequential improvement in Q2, driven by a full quarter of restructuring actions and the second wave of retail pricing. Commodity costs are expected to ease somewhat in the back half of fiscal 2026, with gross margin expansion driven by pricing benefits, mix improvements, and productivity gains.

Valuation: A Reasonable Price for a Dividend Aristocrat

With a P/E Ratio of 28.79 and a Dividend Yield of 4.54%, Hormel Foods' valuation appears reasonable, especially considering its status as a dividend aristocrat. The company's ROE of 5.53% and ROIC of 4.38% indicate a decent return on equity and invested capital. The EV/EBITDA ratio of 12.92 suggests that the company's enterprise value is reasonable relative to its earnings before interest, taxes, depreciation, and amortization.

3. NewsRoom

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Best Dividend Aristocrats As Of March 20, 2026

Mar -21

Source: seekingalpha.com

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5 High-Yield Dividend Kings Down Over the Past Year Are 2026 Bargains

Mar -20

Source: 247wallst.com

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Hormel Foods Unveils Top 5 Pizza Trends for 2026: Calabrian Chili, Brisket, and Global Fusion Lead the Menu

Mar -19

Source: prnewswire.com

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Kraft Heinz vs. McCormick vs.

Mar -16

Source: 247wallst.com

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Top 3 Consumer Staples Dividend Stocks for Reliable Income in 2026

Mar -13

Source: fool.com

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The Best 3 Consumer Staples Stocks to Buy and Hold for Decades

Mar -12

Source: fool.com

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Dimensional Fund Advisors LP Acquires 590,084 Shares of Hormel Foods Corporation $HRL

Mar -12

Source: defenseworld.net

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Hormel: Recent Changes Should Reinvigorate The Company

Mar -09

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.27%)

6. Segments

Retail

Expected Growth: 2.5%

Hormel Foods Corporation's Retail segment growth of 2.5% is driven by increasing demand for convenient and protein-rich products, particularly in the deli and meat snacks categories. Strong brand recognition, innovative product launches, and strategic pricing also contribute to growth. Additionally, the company's focus on e-commerce and digital marketing helps to expand its customer base and increase sales.

Food Service

Expected Growth: 1.8%

Hormel Foods Corporation's Food Service segment growth of 1.8% is driven by increasing demand for convenient, portable, and protein-rich food products, particularly in the education and healthcare channels. Additionally, strategic acquisitions, product innovation, and expanded distribution networks have contributed to the segment's growth.

International

Expected Growth: 2.2%

Hormel Foods' international segment growth of 2.2% is driven by increasing demand for protein-rich products, particularly in Asia and Latin America. Strong sales of Spam and Skippy peanut butter in these regions, coupled with strategic acquisitions and partnerships, have contributed to the segment's growth. Additionally, the company's focus on e-commerce and digital marketing has helped expand its international presence.

7. Detailed Products

Refrigerated Foods

Hormel Foods' Refrigerated Foods segment offers a variety of products, including hams, bacon, sausages, and deli meats.

Jennie-O Turkey Store

Jennie-O Turkey Store offers a range of turkey-based products, including whole turkeys, turkey breasts, and turkey sausages.

Grocery Products

Hormel Foods' Grocery Products segment includes a variety of canned goods, such as SPAM, Dinty Moore stew, and Hormel chili.

International & Other

This segment includes Hormel Foods' international business, as well as other products and services, such as nutritional products and foodservice offerings.

Skippy Peanut Butter

Skippy peanut butter is a popular brand of creamy and crunchy peanut butter.

MegaMex Foods

MegaMex Foods offers a range of Mexican-inspired foods, including Wholly Guacamole and La Tortilla Factory.

8. Hormel Foods Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

Hormel Foods Corporation faces moderate threat from substitutes due to the presence of alternative protein sources such as plant-based meat alternatives and other packaged meat products.

Bargaining Power Of Customers

Hormel Foods Corporation has a diverse customer base, which reduces the bargaining power of individual customers. Additionally, the company's strong brand portfolio and wide distribution network make it difficult for customers to negotiate prices.

Bargaining Power Of Suppliers

Hormel Foods Corporation relies on a network of suppliers for raw materials such as pork, beef, and poultry. While the company has some bargaining power due to its scale, suppliers may still exert some pressure on prices and quality.

Threat Of New Entrants

The threat of new entrants is low in the packaged meat industry due to high barriers to entry, including significant capital requirements, regulatory hurdles, and the need for established distribution networks.

Intensity Of Rivalry

The packaged meat industry is highly competitive, with several established players competing for market share. Hormel Foods Corporation faces intense rivalry from companies such as Tyson Foods, Cargill, and JBS USA.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 29.95%
Debt Cost 3.95%
Equity Weight 70.05%
Equity Cost 5.31%
WACC 4.90%
Leverage 42.76%

11. Quality Control: Hormel Foods Corporation passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Lancaster Colony

A-Score: 5.3/10

Value: 3.5

Growth: 5.9

Quality: 7.5

Yield: 4.0

Momentum: 4.5

Volatility: 6.3

1-Year Total Return ->

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McCormick

A-Score: 5.2/10

Value: 3.1

Growth: 4.2

Quality: 6.2

Yield: 5.0

Momentum: 3.5

Volatility: 9.0

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Hormel Foods

A-Score: 4.8/10

Value: 4.8

Growth: 2.7

Quality: 4.7

Yield: 7.0

Momentum: 1.0

Volatility: 8.3

1-Year Total Return ->

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Simply Good Foods

A-Score: 4.3/10

Value: 5.8

Growth: 5.6

Quality: 6.8

Yield: 0.0

Momentum: 0.5

Volatility: 7.0

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BellRing Brands

A-Score: 3.6/10

Value: 6.2

Growth: 6.2

Quality: 6.0

Yield: 0.0

Momentum: 0.0

Volatility: 3.3

1-Year Total Return ->

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Freshpet

A-Score: 3.6/10

Value: 2.6

Growth: 9.1

Quality: 5.5

Yield: 0.0

Momentum: 0.5

Volatility: 3.7

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

22.14$

Current Price

22.14$

Potential

-0.00%

Expected Cash-Flows