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 net sales grew in the second quarter of fiscal 2026, as strong performance in Jennie-O® ground turkey was partially offset by the strategic exit from select non-core private label snack nut items. Other priority brands such as Applegate® natural and organic meats, Hormel® Black Label® bacon, the Herdez® portfolio, and Hormel Gatherings® party trays contributed to net sales growth in the quarter. For the first six months of fiscal 2026, organic net sales was comparable to prior year, as strong performance in Jennie-O® ground turkey was offset by the strategic exit from select non-core private label snack nut items.

Retail segment profit increased in the second quarter of fiscal 2026 as higher net sales, improved performance across the turkey manufacturing network, and lower SG&A were partially offset by inflationary pressures in the logistics network. Segment profit decreased in the first six months of fiscal 2026 due to lower sales and higher logistics expenses which were partially offset by improved performance across the turkey manufacturing network and favorable SG&A.

Foodservice

Organic net sales growth in the Foodservice segment was broad-based in the second quarter and first six months of fiscal 2026. Organic volume also increased in both periods. Net sales growth for the second quarter and first six months of fiscal 2026 was primarily driven by the customized solutions business, branded pepperoni, and premium prepared proteins. For the first six months of fiscal 2026, notable branded products, including Austin Blues® smoked meats, Hormel® Natural Choice® meats, Fontanini® Italian meats, and Jennie-O® turkey, delivered strong net sales results.

Segment profit increased for the second quarter and first six months of fiscal 2026, primarily driven by net sales performance, which benefited from market-based pricing actions and modest volume growth, despite a challenging operating environment. Segment profit also benefited from improved performance across the turkey manufacturing network.

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 second quarter and first six months of fiscal 2026.

International

For the International segment, organic volume and organic net sales grew in the second quarter and first six months of fiscal 2026. Organic net sales growth was driven by strong results from SPAM® luncheon meat exports and the China business.

International segment profit increased in the second quarter and the first six months of fiscal 2026, primarily due to strong export performance and growth in China.

Unallocated Income and Expense

For the second quarter of fiscal 2026, net unallocated expense increased primarily due to the loss on the sale of the whole-bird turkey business. For the first six months of fiscal 2026, net unallocated expense increased as the loss on the sale of the whole-bird turkey business, expenses associated with the corporate restructuring plan, and expenses for a consulting agreement with a former executive (Consulting Agreement). These expenses were partially offset by the gain on the sale of the controlling equity interest in Justin’s, LLC and lapping the loss on the sale of a non-core sow operation in fiscal 2025.