WASHINGTON (dpa-AFX) - Branded food company Hormel Foods Corp. (HRL), while reporting weak profit and net sales in its third quarter with lower volume, on Thursday announced a revision in fiscal 2026 outlook. Earnings, on a reported basis, and net sales have been lowered from previous estimate, while it raised the lower end of adjusted earnings view.
In pre-market activity on the NYSE, HRL shares were trading 0.95 percent lower at $23.47.
Jeff Ettinger, interim chief executive officer, stated, 'With our strong year-to-date performance and continued opportunities ahead, we are raising and narrowing our adjusted earnings outlook for fiscal 2026 and remain confident in delivering adjusted earnings growth for the year consistent with, or above, our long-term algorithm.'
For fiscal 2026, the company now expects earnings per share to be in the range of $1.06 to $1.12, lower than previous estimate of $1.28 to $1.37.
The revised outlook reflects the estimated loss related to the Brazil divestiture, a non-cash impairment charge related to a minority investment in Indonesia, and a litigation settlement.
Further, adjusted earnings per share guidance has been raised to a range of $1.45 to $1.51, reflecting growth of 6 percent to 10 percent, compared to previous estimate of $1.43 to $1.51.
The firm also raised adjusted operating income guidance to a range of $1.08 billion to $1.12 billion, reflecting growth of 6 percent to 10 percent.
The company now projects net sales to be in the range of $12.1 billion to $12.2 billion, reflecting organic net sales growth of 1 percent to 2 percent.
The previous outlook was net sales in a range of $12.2 billion to $12.5 billion, with organic net sales growth rate 1 percent - 4 percent.
The company's Brazil operations has been classified as held for sale following the announcement of planned divestiture, amid its ongoing efforts to simplify and streamline its portfolio.
In the third quarter, net earnings attributable to the company plunged to $59.57 million or $0.11 per share from last year's $183.74 million or $0.33 per share.
Adjusted earnings were $202.40 million or $0.37 per share for the period, compared to $195.01 million or $0.35 per share a year earlier.
Operating income was $110.90 million, with operating margin of 3.7 percent, compared to $239.75 million a year ago.
Adjusted operating income was $266.22 million, with margin of 9 percent, compared to $254.24 million last year.
The company's net sales for the period fell 2.4 percent to $2.961 billion from $3.032 billion last year with weak retail and international segments, despite growth in Foodservice. Organic net sales were down 2 percent.
Total volume dropped 7.4 percent from last year to 969,078 lbs., with drop in retail, food service and International segments.
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