HORMEL FOODS CORP /DE/

Net sales and segment profit for each of the Company’s reportable segments are set forth below. The Company does not allocate deferred compensation, non-recurring expenses associated with the T&M initiative, corporate restructuring plan costs, gains or losses on the sale of businesses, and interest and other income and expense to its segments when measuring performance. The Company also retains various other income and expenses at the corporate level. Equity in earnings of affiliates is included in segment profit; however, earnings attributable to the Company’s corporate venturing investments and noncontrolling interests are excluded. These items are included below as Net Unallocated Expense and Noncontrolling Interest when reconciling to Earnings Before Income Taxes.

The Company is an integrated enterprise, characterized by substantial intersegment cooperation, cost allocations, and sharing of assets. Therefore, the Company does not represent that these segments, if operated independently, would report the profit and other financial information shown below.

Retail

Organic volume and organic net sales declined in the first quarter of fiscal 2026 compared to the prior year. Organic volume and organic net sales performance was significantly impacted by the strategic exit from select non-core private label snack nut items and declines in branded and private label packaged deli items. Key priority brands delivered year-over-year net sales growth, including Jennie-O® ground turkey and Planters® snack nuts.

Retail segment profit declined in the first quarter of fiscal 2026, due to lower sales, higher raw material input costs, and higher logistics expenses.

Foodservice

Organic net sales growth was broad-based in the Foodservice segment in the first quarter of fiscal 2026, primarily driven by strong performance across the customized solutions business, premium prepared proteins, and branded pepperoni, while organic volume was flat. Notable products such as Austin Blues®smoked meats, Hormel® Fire Braised®meats, and Hormel® Natural Choice®meats delivered strong volume and net sales growth.

Segment profit increased for the first quarter of fiscal 2026, primarily driven by the benefit of pricing actions, which remain aligned with market dynamics.

The Foodservice segment continued to benefit from an extensive range of solutions-based products, its direct-selling organization, and a diverse channel presence during the first quarter of fiscal 2026.

International

For the International segment, organic volume and organic net sales grew in the first quarter of fiscal 2026. Organic net sales growth was driven by strong performance in our multinational businesses and branded exports, led by SPAM® luncheon meat.

International segment profit increased in the first quarter of fiscal 2026 largely due to lower SG&A and growth in China, which were partially offset by lower export margins.

Unallocated Income and Expense

For the first quarter of fiscal 2026, net unallocated expense decreased due to the gain on the sale of the controlling equity interest in Justin’s, LLC, and lapping a loss on the sale of a non-core sow operation in fiscal 2025. These factors were partially offset by expenses associated with the corporate restructuring plan and Consulting Agreement.