Hormel Foods Reaffirms 2026 Outlook After Six Quarters Growth, SG&A Only Up 2%
HRL•Hormel Foods reaffirmed its fiscal 2026 guidance after reporting six straight quarters of top-line growth, citing protein-centric portfolio strength despite higher fuel expenses and commodity cost pressures. Q2 SG&A rose 2%—below trend thanks to productivity measures—while gross margins improved via retail pricing and mix benefits.
1. Guidance Reaffirmation and Top-Line Momentum
Hormel Foods confirmed its fiscal 2026 guidance for both revenue and earnings after posting six consecutive quarters of top-line growth, driven by its protein-centric portfolio and a balanced retail and foodservice mix. Management reiterated confidence in meeting targets despite anticipated headwinds in the back half.
2. Cost Pressures and Margin Progression
The company acknowledged higher fuel and commodity costs but highlighted that a second wave of retail pricing and favorable mix benefits lifted Q2 gross margins above expectations. Elevated freight costs and inventory rebalancing are expected to weigh on margins in Q3.
3. SG&A Savings and Productivity Improvements
SG&A expenses increased by only 2% in Q2, well below prior trends, as productivity initiatives and structural expense controls generated savings that have been reinvested in growth capabilities and talent. Some cost reductions were realized in cost of goods sold, reflecting ongoing efficiency efforts.
4. Retail Portfolio Adjustments and Marketing Investment
Hormel plans strategic portfolio changes, including the sale of the majority of the Justin’s brand and scaling back private-label snack nuts, while maintaining focus on priority branded businesses. A new Chief Marketing Officer will oversee higher year-over-year advertising spending in H2 to drive brand ROI.
