Hormel Foods 10-Q 2026-07-26

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

For the quarterly period ended July 26, 2026

or

For the transition period from _______________ to _______________

Commission File Number: 1-2402

HORMEL FOODS CORPORATION

(Exact name of registrant as specified in its charter)

(507) 437-5611

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

TABLE OF CONTENTS

PART I – FINANCIAL INFORMATION

HORMEL FOODS CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

Unaudited

See accompanying Notes to the Consolidated Financial Statements

HORMEL FOODS CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

Unaudited

See accompanying Notes to the Consolidated Financial Statements

HORMEL FOODS CORPORATION

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION

Unaudited

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RESULTS OF OPERATIONS

Overview

The Company is a global manufacturer and marketer of branded food products and remains focused on driving long-term growth through a balanced business model, a diverse portfolio, and a commitment to creating value for all stakeholders. The Company’s three reportable segments, Retail, Foodservice, and International, are described in Note O - Segment Reporting in the Notes to the Consolidated Financial Statements in this Quarterly Report on Form 10-Q.

The Company discloses certain measures not defined by United States (U.S.) Generally Accepted Accounting Principles (GAAP), including organic volume, organic net sales, adjusted cost of products sold, adjusted selling, general and administrative (SG&A), adjusted SG&A as a percent of net sales, adjusted equity in earnings of affiliates, adjusted operating income, adjusted earnings before income taxes, adjusted provision for income taxes, adjusted net earnings attributable to Hormel Foods Corporation, adjusted diluted earnings per share, and adjusted segment profit. The Company utilizes these non-GAAP measures to understand and evaluate operating performance on a consistent basis. For additional information and reconciliations to the most closely comparable measures calculated in accordance with GAAP, see the "Non-GAAP Measures" section of this Item.

Diluted earnings per share was $0.11 for the third quarter of fiscal 2026, down 67 percent compared to the same period last year. Adjusted diluted earnings per share for the third quarter of fiscal 2026 was $0.37, up 6 percent compared to the same period last year. Significant factors impacting the quarter are listed below. All comparisons are to the same period of the prior year unless otherwise noted.

• Net sales for the third quarter of fiscal 2026 decreased 2 percent. Organic net sales decreased 2 percent with growth from the Foodservice segment offset by declines in the Retail and International segments.

• Total segment profit for the third quarter of fiscal 2026 decreased 17 percent, while adjusted segment profit was flat to the prior year, as growth in the Foodservice segment was offset by declines in the Retail segment. Adjusted segment profit in the International segment was comparable to the prior year.

◦The decrease in Retail segment profit was due to lower sales and higher logistics expenses, which were partially offset by lower SG&A.

◦The increase in Foodservice segment profit was driven primarily by higher sales and improved margins, which were partially offset by higher logistics expenses and higher SG&A.

◦The decrease in International segment profit was significantly impacted by the non-cash impairment of a minority investment in Indonesia.

• Earnings before income taxes decreased 56 percent for the third quarter of fiscal 2026, primarily due to a $56 million loss related to the Brazil divestiture, a $48 million non-cash impairment charge, and a litigation settlement of $38 million. Adjusted earnings before income taxes increased 3 percent, as lower SG&A were partially offset by lower net sales and higher logistics expenses.

• The pre-tax impact of nonrecurring expenses and discrete items in the third quarter of fiscal 2026 was $155 million, including a loss related to the Brazil divestiture, a non-cash impairment of a minority investment in Indonesia, a litigation settlement, and the Company’s Transform and Modernize (T&M) initiative.

Cash flow from operations was $769 million for the first nine months of fiscal 2026, a 47 percent increase primarily reflecting improved inventory management and working capital performance.

Entering the fourth quarter of fiscal 2026, the external environment remains dynamic, with continued volatility associated with macroeconomic and geopolitical conditions. The Company is actively working to mitigate the impact of these conditions. However, continued pressure from the external environment, at a level greater than expected, could have an adverse impact on results of operations.

Consolidated Results

Volume, Net Sales, Earnings, and Diluted Earnings Per Share

Volume and Net Sales

Volume and net sales decreased for the third quarter of fiscal 2026, while volume decreased and net sales increased for the first nine months of fiscal 2026.

For the third quarter of fiscal 2026, net sales increased in the Foodservice segment, while net sales declined in the Retail and International segments. The enterprise organic net sales decline was driven by weaker performance in commodity turkey, the bacon portfolio, and the strategic exit from select non-core private label snack nuts items, which more than offset strong growth in premium prepared proteins, the Jennie-O® turkey portfolio, contract manufacturing, and pizza toppings.

For the third quarter of fiscal 2026, volume decreased for all three segments, primarily driven by the commodity turkey portfolio.

For the first nine months of fiscal 2026, net sales growth in the Foodservice and International segments offset declines in the Retail segment. Strong enterprise performance across the Jennie-O® turkey portfolio, premium prepared proteins, and the Foodservice customized solutions business were key drivers of organic net sales growth. For the first nine months of fiscal 2026, volume declined in all three segments, driven primarily by the commodity turkey portfolio and the strategic exit from select non-core private label snack nut items.

In fiscal 2026, the Company expects net sales growth, which assumes growth across a broad range of categories, increased brand support, and market-based pricing actions. Risks to this outlook include slowing consumer demand and commodity price fluctuations.

Cost of Products Sold

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The Company is exposed to various forms of market risk as a part of its ongoing business practices including commodity price risk, interest rate risk, foreign currency exchange rate risk, and investment risk among others. The Company may use derivative financial and commodity instruments to manage these risks and does not enter into these instruments for trading or speculative purposes. There have been no material changes in the Company's market risk as disclosed in its Annual Report on Form 10-K for the fiscal year ended October 26, 2025, except as noted below.

Commodity Price Risk: The Company is subject to commodity price risk of various inputs used in the course of its operations. To reduce these exposures and offset the fluctuations caused by changes in market conditions, the Company employs hedging programs for certain commodities including grain, lean hogs, natural gas, diesel fuel, and aluminum. These hedging programs utilize futures, swaps, and options contracts and are accounted for as cash flow hedges. The fair value of the Company’s cash flow commodity contracts as of July 26, 2026, was $17.0 million. The Company measures its market risk exposure on its cash flow commodity contracts using a sensitivity analysis, which considers a hypothetical 10 percent change in the market prices. A 10 percent decrease in the market price would have negatively impacted the fair value of the Company’s cash flow commodity contracts as of July 26, 2026, by $32.1 million, which in turn would have lowered the Company’s future cost on purchased commodities by a similar amount.

Interest Rate Risk: The Company is subject to interest rate risk primarily from changes in fair value of long-term fixed rate debt. The Company’s long-term debt had a fair value of $2.5 billion as of July 26, 2026. The Company measures its market risk exposure of long-term fixed rate debt using a sensitivity analysis, which considers a hypothetical 10 percent change in interest rates. As of July 26, 2026, a 10 percent decrease in interest rates would have positively impacted the fair value of the Company’s long-term debt by $59.1 million. A 10 percent increase would have negatively impacted the long-term debt by $54.6 million.

Foreign Currency Exchange Rate Risk: The fair values of certain Company assets and liabilities are subject to fluctuations in foreign currency exchange rates. The Company’s net asset position in foreign currencies was $0.8 billion as of July 26, 2026,

with most of the exposure existing in Chinese yuan, Indonesian rupiah, and Philippine peso. The Company does not use market risk sensitive instruments to manage this risk.

Investment Risk: The Company has corporate-owned life insurance policies classified as trading securities as part of a rabbi trust to fund certain supplemental executive retirement plans and deferred income plans. The rabbi trust is invested primarily in fixed income funds. The Company is subject to market risk due to fluctuations in the value of the remaining investments. As of July 26, 2026, the balance of these securities totaled $218.9 million. A hypothetical 10 percent decline in the value of the investments not held in fixed income funds would have negatively impacted the Company’s pre-tax earnings by approximately $10.8 million, while a 10 percent increase in value would have a positive impact of the same amount.

(a) Disclosure Controls and Procedures.

As of the end of the period covered by this report (the Evaluation Date), the Company carried out an evaluation, under the supervision and with the participation of management, including the Interim Chief Executive Officer and the Interim Chief Financial Officer and Controller, of the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the Exchange Act)). In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Based on that evaluation, the Company’s Interim Chief Executive Officer and Interim Chief Financial Officer and Controller concluded, as of the Evaluation Date, the Company’s disclosure controls and procedures were effective to provide reasonable assurance the information the Company is required to disclose in reports it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and such information is accumulated and communicated to the Company’s management, including its Interim Chief Executive Officer and Interim Chief Financial Officer and Controller, as appropriate, to allow timely decisions regarding required disclosure.

(b) Internal Control over Financial Reporting.

The Company is in the midst of a multi-year transformation project to achieve better analytics, customer service, and process efficiencies through the use of Oracle Cloud Solutions. During fiscal 2024, the Company began implementing the order-to-cash phase at certain business locations. Implementation is expected to be completed in fiscal 2026. Emphasis has been on the maintenance of effective internal controls and assessment of the design and operating effectiveness of key control activities throughout each development and deployment phase.

With the exception of the order-to-cash implementation described above, there were no changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the third quarter of fiscal 2026 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1. LEGAL PROCEEDINGS

Information regarding legal proceedings is available in Note K - Commitments and Contingencies of the Notes to the Consolidated Financial Statements.

The Company’s business, operations, and financial condition are subject to various risks and uncertainties. There have been no material changes to the risk factors previously disclosed in Part I, Item 1A. Risk Factors in the Company’s Annual Report on Form 10-K for the fiscal year ended October 26, 2025.

Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

There were no issuer purchases of equity securities in the quarter ended July 26, 2026. On January 29, 2013, the Company’s Board of Directors authorized the repurchase of 10,000,000 shares of its common stock with no expiration date. On January 26,

2016, the Board of Directors approved a two-for-one split of the Company’s common stock to be effective January 27, 2016. As part of the stock split resolution, the number of shares remaining to be repurchased was adjusted proportionately. As of July 26, 2026, the maximum number of shares that may yet be purchased under the repurchase plans or programs is 3,677,494.

Item 3. DEFAULTS UPON SENIOR SECURITIES

None.

Item 4. MINE SAFETY DISCLOSURES

None.

During the fiscal quarter ended July 26, 2026, no director or officer of the Company adopted, modified, or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as the terms are defined in Item 408(a) of Regulation S-K.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.