Hormel's profit holds up but sales shrink; new CEO bets $1B on chicken
Sales keep shrinking and guidance was cut Hormel's quarterly sales fell 2.4% to $2.96 billion and missed forecasts, with volumes down 7.4%. Management cut its full-year sales outlook to about $12.1-12.2 billion, citing cautious shoppers, weak nut sales and high freight costs. Falling sales and a weaker top line pull the stock down.
The revenue miss and lowered sales guidance are the core reason the stock fell this period.
Profits beat and profit outlook was raised Even with weaker sales, Hormel earned $0.37 a share, beating estimates, and raised the bottom of its full-year profit guidance to $1.45-$1.51. Cost cuts, including an 18% drop in advertising, lifted adjusted operating margin to 9.0% from 8.4%. Better profits support the stock.
This is the main counterweight: earnings and margins improved even as sales fell.
$1.055 billion deal to buy chicken maker Brakebush Hormel agreed to buy Brakebush Brothers, a value-added chicken company with about $1.2 billion in yearly sales, for roughly $1.055 billion. The deal should add to earnings per share from fiscal 2028 and strengthens its Foodservice business, its best-performing unit. Investors see growth ahead.
This is the biggest new strategic move of the period and a clear positive for future growth.
New CEO and CFO take over as Hormel reshapes its portfolio John Ghingo becomes CEO on October 26 and Ash Bhumbla, formerly of Tyson Foods, is the new CFO. Both arrive as Hormel sells its Brazil operations and exits some private-label snack nuts. New leadership could sharpen execution, but the direction is unproven, so the market waits and sees.
Leadership changes and portfolio reshaping are a major force behind Hormel's story this period.