HORMEL FOODS CORP /DE/

Net sales and segment profit for each of the Company’s reportable segments are set forth below. Intersegment sales are excluded from the reported results and are not considered in management's assessment of segment performance. Segment profit excludes unallocated general corporate expenses, deferred compensation, nonrecurring expenses associated with the Transform and Modernize initiative, corporate restructuring plan costs, gains and losses on divestitures, and interest and other income and expense. 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 excluded items are presented below as Net Unallocated Expense and Noncontrolling Interest in the reconciliation 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 decreased in the third quarter of fiscal 2026, as declines in commodity turkey and private label snack nuts were partially offset by strong performance in value-added turkey offerings, contract manufacturing, and Planters® snack nuts.

Additional priority brands that delivered solid growth during the quarter included the SPAM® family of products, Applegate® natural and organic meats, and Hormel® chili. For the first nine months of fiscal 2026, organic net sales declined, as strong performance in Jennie-O® ground turkey was primarily offset by the strategic exit from select non-core private label snack nut items.

Retail segment profit decreased in the third quarter and first nine months of fiscal 2026, as lower net sales and higher logistics expenses were partially offset by lower SG&A.

Foodservice

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

Segment profit increased for the third quarter and first nine months of fiscal 2026, as higher net sales and favorable pork input costs were partially offset by higher logistics and SG&A.

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 third quarter and first nine months of fiscal 2026.

International

For the International segment, organic volume and organic net sales declined in the third quarter of fiscal 2026 as the recognition of certain SPAM® export sales was adversely impacted due to a legal-entity transition. In the first nine months of fiscal 2026, organic volume declined and organic net sales grew. Organic net sales growth was driven by strong performance in multinational businesses, partially offset by the recognition of certain SPAM® export sales which was adversely impacted due to a legal-entity transition.

Segment profit for the third quarter and first nine months of fiscal 2026 was significantly impacted by the non-cash impairment of a minority investment in Indonesia. Adjusted segment profit in the third quarter of fiscal 2026 was comparable to the prior year, as minority investment results were offset by performance in Brazil. Adjusted segment profit grew in the first nine months of fiscal 2026, primarily due to growth in China and minority investment performance.

Unallocated Income and Expense

For the third quarter of fiscal 2026, net unallocated expense increased primarily due to a loss related to the Brazil divestiture and a litigation settlement.

For the first nine months of fiscal 2026, net unallocated expense increased primarily due to the loss on the sale of the whole-bird turkey business, a loss related to the Brazil divestiture, a litigation settlement, 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.