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Investing.com - On Thursday, Hormel Foods Corporation (NYSE:HRL), the food producer, announced Q4 earnings in line with expectations and issued an optimistic fiscal 2026 outlook that overshadowed a challenging fourth quarter marked by significant impairment charges.
The company’s shares climbed 4% in pre-market trading after the results.
The maker of Spam, Skippy, and Planters reported fourth-quarter adjusted earnings of $0.32 per share, matching analyst expectations, while revenue rose 1.5% to $3.2 billion, slightly below the $3.24 billion consensus estimate. The company’s GAAP results showed a quarterly loss of $0.10 per share due to $234 million in non-cash impairment charges primarily related to a minority investment in its International segment and certain intangible assets in the Retail segment.
Despite these challenges, investors responded positively to Hormel’s fiscal 2026 guidance, which projects earnings of $1.43 to $1.51 per share on revenue of $12.2 billion to $12.5 billion, exceeding analyst expectations of $1.37 per share.
"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 company’s fourth-quarter organic net sales increased 2%, with the Foodservice segment showing particular strength with 6.5% organic growth. However, adjusted segment profit declined across divisions, with Retail segment profit falling 23% despite 1% sales growth.
Hormel also announced its 60th consecutive annual dividend increase, raising the quarterly payout by 1% to an annualized rate of $1.17 per share.
"Hormel Foods is entering fiscal 2026 with a clear strategic compass and a commitment to reshape our earnings trajectory," said John Ghingo, president. "Our focus is on meeting the evolving needs of consumers through convenient, protein-centric offerings, brand leadership, and operational excellence."
The company expects modest improvement in commodity markets during the second half of fiscal 2026 and anticipates benefits from its Transform and Modernize initiative and administrative expense reduction program, though it warned of continued earnings pressure in the first quarter.