Hormel Foods Corporation (NYSE:HRL) stock rose Thursday after the company reported fourth-quarter results that beat Wall Street profit expectations but fell short on revenue.
The packaged foods maker also issued an upbeat earnings and sales outlook for the coming year, signaling confidence in its turnaround efforts despite ongoing cost pressures.
The company reported fourth-quarter adjusted earnings per share of 32 cents, beating the analyst consensus estimate of 30 cents.
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Quarterly sales of $3.185 billion missed the Street view of $3.228 billion.
The company reported operating income of $2 million and adjusted operating income of $245 million, resulting in an operating margin of 0.1% and an adjusted operating margin of 7.7%.
Results were weighed down by $234 million in non-cash impairment charges, largely tied to a minority investment in the International segment and certain intangible assets in the Retail segment.
The company posted a loss before income taxes of $22 million, though adjusted earnings before income taxes came in at $234 million.
It reported a diluted loss per share of 10 cents, compared with adjusted diluted earnings per share of 32 cents. Cash flow from operations totaled $323 million.
Segment Performance
Retail volume was flat, while net sales increased 1%.
Foodservice volume declined 5% with organic volume flat; net sales rose 4% and organic net sales were up 6%.
International volume decreased 8% and net sales declined 6%.
“We finished fiscal 2025 with another quarter of solid top-line growth, driven by the continued relevance of our brands and the strength of our value-added portfolio,” said Jeff Ettinger, interim chief executive officer. “Despite this momentum, profitability remained challenged due to persistent input cost inflation and discrete items.”
The CEO highlighted certain “decisive actions” to boost profitability, including targeted pricing initiatives, reductions in administrative expenses, and continued investment in Transform and Modernize initiative.
Inventories at fiscal year-end were $1.7 billion, an increase of $171 million from the beginning of the fiscal year.
Total long-term debt, including current maturities, was $2.9 billion at fiscal year-end.
Outlook
The firm said it expects fiscal 2026 adjusted earnings of $1.43 to $1.51 per share, above the $1.36 that analysts projected.
The company forecasts sales of $12.2 billion to $12.5 billion, compared with the $12.148 billion analyst estimate.
The company’s fiscal 2026 outlook assumes net sales growth across each reporting segment, even in a pressured consumer environment.
It also factors in a modest improvement in most commodity markets during the second half of the year compared with fiscal 2025, though prices are still expected to remain above historical levels.
Management anticipates continued earnings pressure in the first quarter, followed by earnings growth for the remainder of the year.
HRL Price Action: Hormel Foods shares were up 3.57% at $24.10 during premarket trading on Thursday, according to Benzinga Pro data.
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