Hormel Foods has revised its annual sales outlook following challenges in its U.S. turkey and snacks divisions that impacted third-quarter performance.
The company, which owns the Jennie-O turkey and Skippy peanut butter brands, now projects organic net sales growth of 1-2% for the year, down from its previous forecast of 1-4%.
It anticipates annual net sales between $12.1 billion and $12.2 billion.
The revised organic sales growth projection accounts for the impact of its Brazil business divestiture and reflects its assessment of current market conditions.
The company increased its adjusted operating income guidance to $1.08 billion to $1.12 billion and raised adjusted earnings per share (EPS) forecasts to $1.45 to $1.51, both indicating 6% to 10% growth.
However, it reduced diluted EPS guidance to $1.06 to $1.12 from its prior range of $1.28 to $1.37.
Beginning in the fourth quarter, Hormel will exclude the Brazilian unit from year-over-year organic volume and sales comparisons.
Third-quarter net sales declined 2.4% to $2.96 billion year-over-year, while organic net sales fell 2%.
“While net sales declined, the results were influenced by portfolio adjustments, lower commodity-based pricing in certain segments, and ongoing consumer pressures,” said CEO-elect John Ghingo, who will assume leadership in October.
The retail segment saw a 4.3% drop in net sales and a 3.7% decrease in profit, driven by weakness in commodity turkey and private-label snack nuts.
Value-added turkey products, contract manufacturing, and Planters snack nuts contributed positively, alongside volume gains from Hormel Black Label bacon and Applegate meats.
The foodservice segment was the strongest, with a 1.6% increase in sales and a 2.7% rise in segment profit.
International net sales dropped 4.7%, leading to a $29 million loss for the segment after a non-cash impairment charge in Indonesia significantly impacted profitability.
At the corporate level, operating income fell to $111 million from $239.7 million a year ago, though adjusted operating income rose to $266 million.
Interim CEO Jeff Ettinger stated, “We delivered solid third-quarter results, growing adjusted earnings and advancing our fiscal 2026 objectives. With strong year-to-date performance and growth opportunities ahead, we are refining our adjusted earnings outlook for fiscal 2026 and remain confident in achieving growth consistent with or exceeding our long-term targets.”