UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| ☒ | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
For the quarterly period ended January 25, 2026
or
| ☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||
For the transition period from _______________ to _______________
Commission File Number: 1-2402
HORMEL FOODS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware | 41-0319970 | |||||||
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | |||||||
1 Hormel Place, Austin Minnesota | 55912-3680 | |||||||
| (Address of principal executive offices) | (Zip Code) | |||||||
(507) 437-5611
(Registrant’s telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol | Name of each exchange on which registered | ||||||||||||||||||
Common Stock | $0.01465 | par value | HRL | New York Stock Exchange | ||||||||||||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). ☒ Yes ☐ No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | ☒ | Accelerated filer | ☐ | |||||||||||
| Non-accelerated filer | ☐ | Smaller reporting company | ☐ | |||||||||||
| Emerging growth company | ☐ | |||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
| Class | Outstanding at February 22, 2026 | ||||||||||||||||
| Common Stock | $0.01465 | par value | 550,284,207 | ||||||||||||||
Common Stock Nonvoting | $0.01 | par value | 0 | ||||||||||||||
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION | ||||||||
Item 1. | ||||||||
Item 2. | ||||||||
Critical Accounting Estimates | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
PART II - OTHER INFORMATION | ||||||||
Item 1. | ||||||||
Item 1A. | ||||||||
Item 2. | ||||||||
Item 3. | ||||||||
Item 4. | ||||||||
Item 5. | ||||||||
Item 6. | ||||||||
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PART I – FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
HORMEL FOODS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
| Quarter Ended | |||||||||||
In thousands, except per share amounts | January 25, 2026 | January 26, 2025 | |||||||||
| Net Sales | $ | 3,027,317 | $ | 2,988,813 | |||||||
| Cost of Products Sold | 2,557,742 | 2,513,581 | |||||||||
| Gross Profit | 469,575 | 475,232 | |||||||||
| Selling, General, and Administrative | 241,698 | 263,013 | |||||||||
| Equity in Earnings of Affiliates | 15,820 | 16,111 | |||||||||
| Operating Income | 243,697 | 228,330 | |||||||||
| Interest Income | 6,528 | 7,543 | |||||||||
| Interest Expense | 19,728 | 19,462 | |||||||||
| Other Income (Expense), Net | 3,815 | 1,661 | |||||||||
| Earnings Before Income Taxes | 234,312 | 218,073 | |||||||||
| Provision for Income Taxes | 52,542 | 47,543 | |||||||||
| Net Earnings | 181,769 | 170,530 | |||||||||
| Less: Net Earnings (Loss) Attributable to Noncontrolling Interest | (32) | (45) | |||||||||
| Net Earnings Attributable to Hormel Foods Corporation | $ | 181,801 | $ | 170,575 | |||||||
| Net Earnings Per Share: | |||||||||||
| Basic | $ | 0.33 | $ | 0.31 | |||||||
| Diluted | $ | 0.33 | $ | 0.31 | |||||||
| Weighted-average Shares Outstanding: | |||||||||||
| Basic | 550,477 | 549,460 | |||||||||
| Diluted | 550,706 | 549,854 | |||||||||
See accompanying Notes to the Consolidated Financial Statements
3
HORMEL FOODS CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Unaudited
| Quarter Ended | |||||||||||
In thousands | January 25, 2026 | January 26, 2025 | |||||||||
| Net Earnings | $ | 181,769 | $ | 170,530 | |||||||
| Other Comprehensive Income (Loss), Net of Tax: | |||||||||||
| Foreign Currency Translation | 2,492 | (27,078) | |||||||||
| Pension and Other Benefits | 1,487 | 2,366 | |||||||||
Derivatives and Hedging | 6,948 | 15,862 | |||||||||
| Equity Method Investments | (210) | 473 | |||||||||
Total Other Comprehensive Income (Loss) | 10,718 | (8,377) | |||||||||
| Comprehensive Income | 192,487 | 162,153 | |||||||||
Less: Comprehensive Income (Loss) Attributable to Noncontrolling Interest | 63 | (490) | |||||||||
Comprehensive Income Attributable to Hormel Foods Corporation | $ | 192,423 | $ | 162,643 | |||||||
See accompanying Notes to the Consolidated Financial Statements
4
HORMEL FOODS CORPORATION
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
Unaudited
In thousands, except share and per share amounts | January 25, 2026 | October 26, 2025 | |||||||||
| Assets | |||||||||||
| Cash and Cash Equivalents | $ | 867,906 | $ | 670,679 | |||||||
| Short-term Marketable Securities | 33,302 | 32,909 | |||||||||
Accounts Receivable (Net of Allowance of $3,778 and $3,743, respectively) | 696,252 | 784,812 | |||||||||
| Inventories | 1,647,271 | 1,747,279 | |||||||||
| Taxes Receivable | 58,808 | 96,791 | |||||||||
| Prepaid Expenses and Other Current Assets | 84,702 | 73,187 | |||||||||
| Total Current Assets | 3,388,240 | 3,405,656 | |||||||||
| Goodwill | 4,888,532 | 4,924,087 | |||||||||
| Intangible Assets | 1,588,104 | 1,647,297 | |||||||||
| Pension Assets | 209,262 | 211,826 | |||||||||
| Investments in Affiliates | 577,058 | 533,984 | |||||||||
| Other Assets | 423,755 | 431,500 | |||||||||
| Property, Plant, and Equipment, Net | 2,241,482 | 2,238,770 | |||||||||
| Total Assets | $ | 13,316,433 | $ | 13,393,119 | |||||||
| Liabilities and Shareholders’ Investment | |||||||||||
| Accounts Payable | $ | 670,938 | $ | 731,578 | |||||||
| Accrued Expenses | 60,350 | 55,772 | |||||||||
| Accrued Marketing Expenses | 129,824 | 113,947 | |||||||||
| Employee-related Expenses | 224,470 | 273,402 | |||||||||
| Interest and Dividends Payable | 175,868 | 180,700 | |||||||||
| Taxes Payable | 4,983 | 18,752 | |||||||||
| Current Maturities of Long-term Debt | 6,485 | 6,646 | |||||||||
| Total Current Liabilities | 1,272,917 | 1,380,796 | |||||||||
| Long-term Debt Less Current Maturities | 2,851,007 | 2,850,778 | |||||||||
| Pension and Postretirement Benefits | 356,108 | 358,984 | |||||||||
| Deferred Income Taxes | 663,854 | 661,349 | |||||||||
| Other Long-term Liabilities | 219,340 | 225,397 | |||||||||
| Shareholders’ Investment | |||||||||||
Preferred Stock, Par Value $0.01 a Share — Authorized 160,000,000 Shares; Issued — None | — | — | |||||||||
Common Stock, Nonvoting, Par Value $0.01 a Share — Authorized 400,000,000 Shares; Issued — None | — | — | |||||||||
Common Stock, Par Value $0.01465 a Share — Authorized 1,600,000,000 Shares; Issued 550,211,704 and 550,107,260 Shares, respectively | 8,061 | 8,059 | |||||||||
| Additional Paid-in Capital | 625,982 | 620,069 | |||||||||
| Accumulated Other Comprehensive Loss | (233,023) | (243,646) | |||||||||
| Retained Earnings | 7,537,481 | 7,516,690 | |||||||||
| Hormel Foods Corporation Shareholders’ Investment | 7,938,500 | 7,901,171 | |||||||||
| Noncontrolling Interest | 14,707 | 14,644 | |||||||||
| Total Shareholders’ Investment | 7,953,207 | 7,915,815 | |||||||||
| Total Liabilities and Shareholders’ Investment | $ | 13,316,433 | $ | 13,393,119 | |||||||
See accompanying Notes to the Consolidated Financial Statements
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HORMEL FOODS CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ INVESTMENT
Unaudited
| Quarter Ended January 26, 2025 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hormel Foods Corporation Shareholders | |||||||||||||||||||||||||||||||||||||||||||||||||||||
Common Stock | Treasury Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Non-controlling Interest | Total Shareholders’ Investment | |||||||||||||||||||||||||||||||||||||||||||||||
In thousands, except per share amounts | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at October 27, 2024 | 548,605 | $ | 8,037 | — | $ | — | $ | 571,178 | $ | 7,677,537 | $ | (263,331) | $ | 10,590 | $ | 8,004,011 | |||||||||||||||||||||||||||||||||||||
Net Earnings (Loss) | 170,575 | (45) | 170,530 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Other Comprehensive Income (Loss) | (7,932) | (445) | (8,377) | ||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based Compensation Expense | 5,454 | 5,454 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of Stock-based Compensation Awards, Net of Withholding Taxes | 1,180 | 17 | 25,980 | 25,997 | |||||||||||||||||||||||||||||||||||||||||||||||||
Declared Dividends – $0.2900 per Share | 275 | (159,448) | (159,173) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at January 26, 2025 | 549,785 | $ | 8,054 | — | $ | — | $ | 602,887 | $ | 7,688,663 | $ | (271,263) | $ | 10,101 | $ | 8,038,442 | |||||||||||||||||||||||||||||||||||||
| Quarter Ended January 25, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Hormel Foods Corporation Shareholders | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| Common Stock | Treasury Stock | Additional Paid-in Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | Non- controlling Interest | Total Shareholders’ Investment | |||||||||||||||||||||||||||||||||||||||||||||||
In thousands, except per share amounts | Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at October 26, 2025 | 550,107 | $ | 8,059 | — | $ | — | $ | 620,069 | $ | 7,516,690 | $ | (243,646) | $ | 14,644 | $ | 7,915,815 | |||||||||||||||||||||||||||||||||||||
Net Earnings (Loss) | 181,801 | (32) | 181,769 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Other Comprehensive Income (Loss) | 10,623 | 95 | 10,718 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based Compensation Expense | 6,919 | 6,919 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Exercise of Stock-based Compensation Awards, Net of Withholding Taxes | 104 | 2 | (1,108) | (1,106) | |||||||||||||||||||||||||||||||||||||||||||||||||
Declared Dividends – $0.2925 per Share | 102 | (161,009) | (160,907) | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance at January 25, 2026 | 550,212 | $ | 8,061 | — | $ | — | $ | 625,982 | $ | 7,537,481 | $ | (233,023) | $ | 14,707 | $ | 7,953,207 | |||||||||||||||||||||||||||||||||||||
See accompanying Notes to the Consolidated Financial Statements
6
HORMEL FOODS CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
Unaudited
| Quarter Ended | |||||||||||
In thousands | January 25, 2026 | January 26, 2025 | |||||||||
| Operating Activities | |||||||||||
| Net Earnings | $ | 181,769 | $ | 170,530 | |||||||
| Adjustments to Reconcile to Net Cash Provided by (Used in) Operating Activities: | |||||||||||
| Depreciation and Amortization | 67,095 | 65,872 | |||||||||
| Equity in Earnings of Affiliates | (15,820) | (16,111) | |||||||||
| Distributions Received from Equity Method Investees | 13,051 | 19,894 | |||||||||
| Provision for Deferred Income Taxes | 139 | (70) | |||||||||
| Non-cash Investment Activities | (3,237) | (2,547) | |||||||||
| Stock-based Compensation Expense | 6,919 | 5,454 | |||||||||
| Operating Lease Cost | 10,821 | 9,580 | |||||||||
| Loss (Gain) on Sale of Business | (23,508) | 10,800 | |||||||||
| Other Non-cash, Net | 1,465 | 1,140 | |||||||||
| Changes in Operating Assets and Liabilities, Net of Divestitures: | |||||||||||
| Decrease (Increase) in Accounts Receivable | 90,901 | 57,194 | |||||||||
| Decrease (Increase) in Inventories | 91,293 | 55,606 | |||||||||
| Decrease (Increase) in Prepaid Expenses and Other Assets | 833 | (8,101) | |||||||||
| Increase (Decrease) in Pension and Postretirement Benefits | 1,728 | 10,167 | |||||||||
| Increase (Decrease) in Accounts Payable and Accrued Expenses | (97,026) | (56,325) | |||||||||
| Increase (Decrease) in Net Income Taxes Payable | 22,791 | (13,877) | |||||||||
| Net Cash Provided by (Used in) Operating Activities | 349,214 | 309,206 | |||||||||
| Investing Activities | |||||||||||
| Net Sale (Purchase) of Securities | (323) | (1,387) | |||||||||
| Proceeds from Sale of Business | 78,853 | 13,643 | |||||||||
| Purchases of Property, Plant, and Equipment | (68,993) | (72,167) | |||||||||
| Proceeds from Sales of Property, Plant, and Equipment | 5 | 35 | |||||||||
| Proceeds from (Purchases of) Affiliates and Other Investments | (1,593) | (1,393) | |||||||||
| Proceeds from Company-owned Life Insurance | — | 936 | |||||||||
| Net Cash Provided by (Used in) Investing Activities | 7,948 | (60,333) | |||||||||
| Financing Activities | |||||||||||
| Repayments of Long-term Debt and Finance Leases | (1,825) | (2,202) | |||||||||
| Dividends Paid on Common Stock | (159,501) | (154,980) | |||||||||
| Proceeds from Stock-based Compensation Plans, Net of Withholding Taxes | (1,106) | 14,120 | |||||||||
| Net Cash Provided by (Used in) Financing Activities | (162,433) | (143,063) | |||||||||
| Effect of Exchange Rate Changes on Cash | 2,498 | (7,294) | |||||||||
| Increase (Decrease) in Cash and Cash Equivalents | 197,228 | 98,516 | |||||||||
| Cash and Cash Equivalents at Beginning of Year | 670,679 | 741,881 | |||||||||
| Cash and Cash Equivalents at End of Period | $ | 867,906 | $ | 840,398 | |||||||
Supplemental Non-cash Investing and Financing Activities: | |||||||||||
Purchases of Property, Plant, and Equipment Included in Accounts Payable | $ | 26,207 | $ | 20,090 | |||||||
See accompanying Notes to the Consolidated Financial Statements
7
HORMEL FOODS CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Unaudited
NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation: The accompanying unaudited consolidated financial statements of Hormel Foods Corporation (the Company) have been prepared in accordance with accounting principles generally accepted in the United States (U.S.) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. Accordingly, they do not include certain information and footnotes required by U.S. generally accepted accounting principles (GAAP) for comprehensive financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results and cash flows for the interim period are not necessarily indicative of the results that may be expected for the full year.
These statements should be reviewed in conjunction with the consolidated financial statements and associated notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended October 26, 2025. The significant accounting policies used in preparing these interim consolidated financial statements are consistent with those described in Note A - Summary of Significant Accounting Policies to the consolidated financial statements in the Form 10-K. The Company has determined there have been no material changes in the Company’s significant accounting policies, including estimates and assumptions, as disclosed in its Annual Report on Form 10-K for the fiscal year ended October 26, 2025.
Rounding: Certain amounts in the consolidated financial statements and associated notes may not foot due to rounding. All percentages have been calculated using unrounded amounts.
Reclassifications: Certain prior year amounts have been reclassified to conform to the current year presentation.
•Consolidated Statements of Operations: Interest and Investment Income has been separated into Interest Income and Other Income (Expense), Net.
•Consolidated Statements of Financial Position: The major classes of Property, Plant, and Equipment are now disclosed in Note F - Property, Plant, and Equipment.
Accounting Changes and Recent Accounting Pronouncements:
New Accounting Pronouncements Not Yet Adopted
In December 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2023-09 Income Taxes (Topic 740): Improvements to Income Tax Disclosures. The update is intended to enhance transparency and decision usefulness of annual income tax disclosures. The ASU updates income tax disclosure requirements by requiring specific categories and greater disaggregation within the rate reconciliation and disaggregation of income taxes paid by jurisdiction. The ASU is effective for the Company's fiscal year ending October 25, 2026. The Company is currently assessing the impact of adopting the updated provisions.
In November 2024, the FASB issued ASU 2024-03 Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses. Subsequently, in January 2025, the FASB issued ASU 2025-01 Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date. The new guidance is intended to provide investors more detailed disclosures around specific types of expenses. The new disclosures require certain details for expenses presented on the face of the Consolidated Statements of Operations as well as selling expenses to be presented in the notes to the financial statements. As clarified by ASU 2025-01, the guidance is effective for the Company's fiscal year ending October 29, 2028, and subsequent interim periods thereafter. The disclosure updates are required to be applied prospectively with the option for retrospective application. The Company is currently assessing the impact of adopting the updated guidance.
In September 2025, the FASB issued ASU 2025-06 Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software. The new guidance is intended to modernize the accounting for internal-use software costs and better align recognition practices. The update introduces principles-based criteria entities must consider to begin capitalizing costs based on management authorization and project completion probability. The guidance is effective for the Company's fiscal year ending October 28, 2029, and subsequent interim periods thereafter, with early adoption permitted. Several transition approaches are available including prospective, retrospective, and a modified transition approach. The Company is currently assessing the impact, transition approach, and timing of adoption.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. The update is intended to improve the navigability of interim disclosure requirements and provide additional guidance about disclosures
8
to be provided in interim reporting periods, including a requirement to disclose events since the end of the last annual reporting period that have a material impact on the entity. The update is effective for interim reporting periods within the Company’s fiscal year beginning October 30, 2028. Early adoption is permitted and the guidance may be applied prospectively or retrospectively. The Company is currently assessing the impact of adopting the updated provisions. The adoption is not expected to have a material effect on the Company’s financial condition or results of operations.
Recently issued accounting standards or pronouncements not disclosed have been excluded as they are currently not relevant to the Company.
NOTE B - ACQUISITIONS AND DIVESTITURES
Justin's, LLC Transaction: On December 15, 2025, the Company sold 51% of its equity interest in Justin's, LLC and related assets to Forward Consumer Partners, LLC for cash proceeds of $77.3 million, net of estimated working capital adjustments. As a result of the transaction, the Company no longer holds a controlling financial interest in Justin's, LLC, resulting in deconsolidation. The sale resulted in a pre-tax gain of $23.5 million, which was recognized in Selling, General, and Administrative. Results of operations for Justin's, LLC were primarily reflected in the Retail segment prior to deconsolidation.
The Company maintained the ability to exercise significant influence over the entity in its new structure, Joy Topco LP (f/k/a Justin's, LLC), and will account for this interest as an equity method investment. The Company recorded the remaining 49% equity interest in Joy Topco LP at its estimated fair value of $46.3 million plus $1.1 million in capitalized deal costs in Investment in Affiliates. The Company engaged a third-party specialist to assist with the valuation, which reflected a combination of observable data and significant unobservable, or Level 3, inputs to determine the estimated fair value of the investment. Results of Joy Topco LP are reported as Equity in Earnings of Affiliates within the Retail segment. See Note D - Investments in Affiliates for additional information.
Mountain Prairie, LLC Divestiture: On November 18, 2024, the Company sold its equity interests in a non-core sow operation, Mountain Prairie, LLC, and related assets to Chaparral Ranches, LLC for cash proceeds of $13.6 million. The divestiture resulted in a pre-tax loss of $11.3 million, including transaction costs, which was recognized in Selling, General, and Administrative. Results of operations for Mountain Prairie, LLC were primarily reflected within the Retail segment through the date of divestiture.
Whole-bird Turkey Transaction: On February 13, 2026, subsequent to the end of the quarter, the Company entered into a definitive agreement to sell its whole-bird turkey business to Life-Science Innovations (LSI). LSI will acquire the Melrose, Minnesota, whole-bird production facility; Swanville, Minnesota, feed mill; and associated transportation assets. LSI will also assume supply contracts with certain third-party turkey growers and provide co-manufacturing services to the Company through the end of fiscal 2026. The purchase price consists of cash at closing and a secured promissory note payable over time. The transaction is expected to close by the end of the second quarter of fiscal 2026, subject to customary closing conditions. The Company is evaluating the accounting implications of the planned sale.
NOTE C - GOODWILL AND INTANGIBLE ASSETS
Goodwill: The change in the carrying amount of goodwill for the quarter ended January 25, 2026, is:
| In thousands | Retail | Foodservice | International | Total | |||||||||||||||||||
Balance at October 26, 2025 | $ | 2,916,796 | $ | 1,748,355 | $ | 258,936 | $ | 4,924,087 | |||||||||||||||
Goodwill Sold(1) | (33,570) | (1,330) | — | (34,900) | |||||||||||||||||||
| Foreign Currency Translation | — | — | (655) | (655) | |||||||||||||||||||
Balance at January 25, 2026 | $ | 2,883,226 | $ | 1,747,025 | $ | 258,281 | $ | 4,888,532 | |||||||||||||||
(1) Goodwill sold during fiscal 2026 was due to the sale of the Company's controlling equity interest in Justin's, LLC. See Note B - Acquisitions and Divestitures for additional information.
9
Intangible Assets: The Company's intangible assets by type are:
| January 25, 2026 | October 26, 2025 | |||||||||||||||||||||||||||||||||||||
| In thousands | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | Gross Carrying Amount | Accumulated Amortization | Net Carrying Amount | ||||||||||||||||||||||||||||||||
| Definite-lived Intangible Assets | ||||||||||||||||||||||||||||||||||||||
| Customer Relationships | $ | 107,648 | $ | (57,026) | $ | 50,622 | $ | 134,328 | $ | (78,565) | $ | 55,763 | ||||||||||||||||||||||||||
| Other Definite-lived Intangibles | 59,095 | (25,330) | 33,764 | 59,445 | (24,620) | 34,824 | ||||||||||||||||||||||||||||||||
| Trade Names/Trademarks | — | — | — | 6,210 | (6,210) | — | ||||||||||||||||||||||||||||||||
| Foreign Currency Translation | — | (2,885) | (2,885) | — | (4,476) | (4,476) | ||||||||||||||||||||||||||||||||
| Total Definite-lived Intangible Assets | $ | 166,742 | $ | (85,241) | $ | 81,501 | $ | 199,982 | $ | (113,872) | $ | 86,111 | ||||||||||||||||||||||||||
| Indefinite-lived Intangible Assets | ||||||||||||||||||||||||||||||||||||||
Brands/Trade Names/Trademarks(1) | $ | 1,513,306 | $ | 1,567,623 | ||||||||||||||||||||||||||||||||||
| Foreign Currency Translation | (6,703) | (6,437) | ||||||||||||||||||||||||||||||||||||
| Total Indefinite-lived Intangible Assets | 1,506,603 | 1,561,186 | ||||||||||||||||||||||||||||||||||||
| Total Intangible Assets | $ | 1,588,104 | $ | 1,647,297 | ||||||||||||||||||||||||||||||||||
(1) Includes the removal of a $54.3 million indefinite‑lived trade name following the sale of the Company's controlling equity interest in Justin's, LLC. See Note B - Acquisitions and Divestitures for additional information.
Amortization expense on intangible assets is as follows:
| Quarter Ended | |||||||||||
| In thousands | January 25, 2026 | January 26, 2025 | |||||||||
| Amortization Expense | $ | 3,070 | $ | 3,830 | |||||||
Estimated annual amortization expense on intangible assets for the five fiscal years after October 26, 2025, is as follows:
| In thousands | Amortization Expense | ||||
| 2026 | $ | 12,042 | |||
| 2027 | 11,685 | ||||
| 2028 | 10,773 | ||||
| 2029 | 9,511 | ||||
| 2030 | 9,326 | ||||
NOTE D - INVESTMENTS IN AFFILIATES
Ownership: As of January 25, 2026, the Company's equity method investments include:
| Segment | Ownership Percentage | |||||||
| MegaMex Foods, LLC | Retail | 50% | ||||||
Joy Topco LP(1) | Retail | 49% | ||||||
| The Purefoods - Hormel Company, Inc. | International | 40% | ||||||
PT Garudafood Putra Putri Jaya Tbk. (Garudafood) | International | 30% | ||||||
| Okinawa Hormel Ltd. | International | 26% | ||||||
| Corporate Venturing Investments | n/a | 26% - 43% | ||||||
(1) In the first quarter of fiscal 2026, the Company recorded a 49% ownership interest in Joy Topco LP in connection with the sale of its controlling equity interest in Justin’s, LLC. See Note B - Acquisitions and Divestitures for additional information.
Equity in Earnings: The Company's share of earnings from its equity method investments is recorded as Equity in Earnings of Affiliates and further disclosed in Note O - Segment Reporting. Equity in earnings from corporate venturing investments is not included in any of the reportable segments' measure of segment profit.
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Distributions: Distributions received from equity method investees consists of:
| In thousands | Quarter Ended | |||||||||||||
| January 25, 2026 | January 26, 2025 | |||||||||||||
| Distributions | $ | 13,051 | $ | 19,894 | ||||||||||
Basis Difference: The initial and unamortized basis differences as of January 25, 2026, are:
In thousands | Initial Basis Difference | Unamortized Basis Difference | ||||||
Garudafood(1) | $ | 324,828 | $ | 135,545 | ||||
| MegaMex Foods, LLC | 21,273 | 7,397 | ||||||
(1) The Garudafood remaining unamortized basis difference includes the impact of foreign currency translation and impairment.
Fair Value: Based on quoted market prices, the fair value of the common stock held in Garudafood was $233.7 million as of January 23, 2026. The Company's other equity method investments do not have readily determinable fair values.
Transactions: The Company has agreements with its equity method investments which, in some cases, result in amounts due to or due from these parties. The amounts due to equity method investees were $44.8 million and $38.8 million as of January 25, 2026, and October 26, 2025, respectively. The amounts due from equity method investees were $9.3 million and $11.9 million as of January 25, 2026, and October 26, 2025, respectively.
NOTE E - INVENTORIES
Principal components of inventories are:
In thousands | January 25, 2026 | October 26, 2025 | |||||||||
| Finished Products | $ | 952,510 | $ | 1,055,472 | |||||||
| Raw Materials and Work-in-Process | 413,015 | 414,436 | |||||||||
| Operating Supplies | 141,220 | 142,643 | |||||||||
| Maintenance Materials and Parts | 140,526 | 134,729 | |||||||||
Total Inventories | $ | 1,647,271 | $ | 1,747,279 | |||||||
NOTE F - PROPERTY, PLANT, AND EQUIPMENT
Property, plant, and equipment consists of the following:
In thousands | January 25, 2026 | October 26, 2025 | |||||||||
Land | $ | 74,971 | $ | 74,710 | |||||||
Buildings | 1,538,947 | 1,537,276 | |||||||||
Equipment | 3,055,464 | 3,014,677 | |||||||||
Construction in Progress | 283,249 | 286,466 | |||||||||
Less: Allowance for Depreciation | (2,711,149) | (2,674,359) | |||||||||
Property, Plant, and Equipment, Net | $ | 2,241,482 | $ | 2,238,770 | |||||||
NOTE G - DERIVATIVES AND HEDGING
The Company uses hedging programs to manage risk associated with various commodity purchases and interest rates. These programs utilize futures, swaps, and options contracts to manage the Company’s exposure to market fluctuations.
Cash Flow Commodity Hedges: The Company uses futures, swaps, and options contracts to offset price fluctuations in the Company’s future purchases of grain, lean hogs, natural gas, and diesel fuel. These contracts are designated as cash flow hedges; therefore, the related gains or losses are reported in Accumulated Other Comprehensive Loss (AOCL) and reclassified into earnings, through Cost of Products Sold, in the periods in which the hedged transactions affect earnings. The Company typically does not hedge its grain, natural gas, or diesel fuel exposure beyond fiscal years and its lean hog exposure beyond fiscal year.
Fair Value Commodity Hedges: The Company designates the futures it uses to minimize the price risk assumed when fixed forward priced contracts are offered to the Company’s lean hog and grain suppliers as fair value hedges. The programs are
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intended to make the forward priced commodities cost nearly the same as cash market purchases at the date of delivery. Changes in the fair value of the futures contracts and the offsetting gain or loss on the hedged purchase commitment are marked-to-market through earnings and recorded as a Current Asset and Current Liability, respectively. Gains or losses related to these fair value hedges are recognized through Cost of Products Sold in the periods in which the hedged transactions affect earnings.
Cash Flow Interest Rate Hedges: In the second quarter of fiscal 2021, the Company designated two separate interest rate locks as cash flow hedges to manage interest rate risk associated with anticipated debt transactions. The total notional amount of the Company’s locks was $1.25 billion. In the third quarter of fiscal 2021, the associated unsecured senior notes were issued with tenors of and 30 years and both locks were lifted (See Note L - Long-term Debt and Other Borrowing Arrangements). Mark-to-market gains and losses on these instruments were deferred as a component of AOCL. The resulting gain in AOCL is reclassified to Interest Expense in the period in which the hedged transactions affect earnings.
Other Derivatives: The Company holds certain futures and swap contracts to manage the Company’s exposure to fluctuations in grain and pork commodity markets for which it has not applied hedge accounting. Activity related to derivatives not designated for hedge accounting was immaterial to the consolidated financial statements during the quarters ended January 25, 2026, and January 26, 2025.
Volume: The Company’s outstanding contracts related to its commodity hedging programs include:
In millions | January 25, 2026 | October 26, 2025 | |||||||||||||||
| Corn | 28.3 | bushels | 27.4 | bushels | |||||||||||||
| Lean Hogs | 201.4 | pounds | 188.6 | pounds | |||||||||||||
| Natural Gas | 3.6 | MMBtu | 3.6 | MMBtu | |||||||||||||
Diesel Fuel | 8.3 | gallons | 7.5 | gallons | |||||||||||||
Fair Value of Derivatives: The gross fair values of the Company’s derivative instruments designated as hedges are:
| January 25, 2026 | October 26, 2025 | |||||||||||||||||||||||||
In thousands | Assets | Liabilities | Assets | Liabilities | ||||||||||||||||||||||
Gross Fair Value of Commodity Contracts | $ | 19,482 | $ | (4,336) | $ | 9,862 | $ | (4,243) | ||||||||||||||||||
Counterparty and Collateral Netting Offset(1) | (6,854) | 4,336 | 304 | 4,243 | ||||||||||||||||||||||
Amounts Recognized in Prepaid Expenses and Other Current Assets | $ | 12,629 | $ | — | $ | 10,166 | $ | — | ||||||||||||||||||
(1) Per the terms of the Company’s master netting arrangements, the gross fair value of the Company’s commodity contracts was offset by the obligation to return net cash collateral of $2.5 million (including cash payable of $4.4 million and $1.9 million of realized gain) as of January 25, 2026, and the right to reclaim net cash collateral of $4.5 million (including cash payable of $5.5 million and $10.1 million of realized gain) as of October 26, 2025.
Fair Value Hedge - Assets (Liabilities): The carrying amount of the Company’s fair value hedged assets (liabilities) are:
In thousands | Location on Consolidated Statements of Financial Position | January 25, 2026 | October 26, 2025 | |||||||||||
Commodity Contracts | Accounts Payable(1) | $ | (288) | $ | (157) | |||||||||
(1) Represents the carrying amount of fair value hedged assets and liabilities, which are offset by other assets included in master netting arrangements described above.
Accumulated Other Comprehensive Loss Impact: As of January 25, 2026, the Company included in AOCL pre-tax hedging gains of $14.9 million on commodity contracts and gains of $10.3 million related to interest rate settled positions. The Company expects to recognize the majority of the gains on commodity contracts over the next twelve months. Gains on interest rate contracts offset the hedged interest payments over the tenor of the associated debt instruments.
The pre-tax gains (losses) recognized in AOCL related to the Company’s derivative instruments are:
| Quarter Ended | ||||||||||||||
| In thousands | January 25, 2026 | January 26, 2025 | ||||||||||||
Commodity Contracts | $ | 11,631 | $ | 19,134 | ||||||||||
Excluded Component(1) | 10 | (87) | ||||||||||||
(1) Represents the time value of commodity options excluded from the assessment of effectiveness for which the difference between changes in fair value and periodic amortization is recorded in AOCL.
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The pre-tax gains (losses) reclassified from AOCL into earnings related to the Company’s derivative instruments are:
Location on Consolidated Statements of Operations | Quarter Ended | ||||||||||||||||
| In thousands | January 25, 2026 | January 26, 2025 | |||||||||||||||
Commodity Contracts | Cost of Products Sold | $ | 2,194 | $ | (2,141) | ||||||||||||
| Interest Rate Contracts | Interest Expense | 247 | 247 | ||||||||||||||
See Note I - Accumulated Other Comprehensive Loss for the after-tax impact of these gains or losses on Net Earnings.
Consolidated Statements of Operations Impact: The effect of pre-tax gains (losses) related to the Company’s derivative instruments are:
| Quarter Ended | |||||||||||
In thousands | January 25, 2026 | January 26, 2025 | |||||||||
| Net Earnings Attributable to Hormel Foods Corporation | $ | 181,801 | $ | 170,575 | |||||||
| Cash Flow Hedges - Commodity Contracts | |||||||||||
| Gain (Loss) Reclassified from AOCL | 2,194 | (2,141) | |||||||||
| Amortization of Excluded Component from Options | (227) | (208) | |||||||||
| Fair Value Hedges - Commodity Contracts | |||||||||||
Gain (Loss) on Commodity Futures(1) | (92) | 1,704 | |||||||||
Total Gain (Loss) on Commodity Contracts | 1,876 | (645) | |||||||||
Cash Flow Hedges - Interest Rate Contracts | |||||||||||
| Gain (Loss) Reclassified from AOCL | 247 | 247 | |||||||||
Total Gain (Loss) on Interest Rate Contracts | 247 | 247 | |||||||||
| Total Gain (Loss) Recognized in Earnings | $ | 2,123 | $ | (398) | |||||||
(1) Represents gains or losses on commodity contracts designated as fair value hedges that were closed during the quarters ended January 25, 2026, and January 26, 2025, which were offset by a corresponding gain or loss on the underlying hedged purchase commitment. Additional gains or losses related to changes in the fair value of open commodity contracts, along with the offsetting gain or loss on the hedged purchase commitment, are also marked-to-market through earnings with no impact on a net basis.
NOTE H - PENSION AND OTHER POSTRETIREMENT BENEFITS
Net periodic cost of defined benefit plans consists of:
| Pension Benefits | |||||||||||
| Quarter Ended | |||||||||||
In thousands | January 25, 2026 | January 26, 2025 | |||||||||
| Service Cost | $ | 10,034 | $ | 11,973 | |||||||
| Interest Cost | 18,066 | 17,646 | |||||||||
| Expected Return on Plan Assets | (22,351) | (21,737) | |||||||||
Amortization of Prior Service Cost (Credit) | 128 | 319 | |||||||||
Recognized Actuarial Loss (Gain) | 2,190 | 3,014 | |||||||||
Net Periodic Cost | $ | 8,067 | $ | 11,215 | |||||||
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Postretirement Benefits | |||||||||||
| Quarter Ended | |||||||||||
In thousands | January 25, 2026 | January 26, 2025 | |||||||||
| Service Cost | $ | 35 | $ | 42 | |||||||
| Interest Cost | 2,202 | 2,480 | |||||||||
Amortization of Prior Service Cost (Credit) | (7) | 2 | |||||||||
Recognized Actuarial Loss (Gain) | (307) | (40) | |||||||||
Net Periodic Cost | $ | 1,922 | $ | 2,484 | |||||||
NOTE I - ACCUMULATED OTHER COMPREHENSIVE LOSS
Components of Accumulated Other Comprehensive Loss are as follows:
In thousands | Foreign Currency Translation | Pension & Other Benefits | Derivatives & Hedging | Equity Method Investments | Accumulated Other Comprehensive Loss | |||||||||||||||||||||||||||||||||
Balance at October 26, 2025 | $ | (114,431) | $ | (143,017) | $ | 12,038 | $ | 1,763 | $ | (243,646) | ||||||||||||||||||||||||||||
| Unrecognized Gains (Losses) | ||||||||||||||||||||||||||||||||||||||
| Gross | 2,398 | (24) | 11,641 | 679 | 14,694 | |||||||||||||||||||||||||||||||||
| Tax Effect | — | — | (2,857) | — | (2,857) | |||||||||||||||||||||||||||||||||
| Reclassification into Net Earnings | ||||||||||||||||||||||||||||||||||||||
| Gross | — | 2,004 | (1) | (2,441) | (2) | (889) | (3) | (1,327) | ||||||||||||||||||||||||||||||
| Tax Effect | — | (493) | 606 | — | 112 | |||||||||||||||||||||||||||||||||
| Change Net of Tax | 2,398 | 1,487 | 6,948 | (210) | 10,623 | |||||||||||||||||||||||||||||||||
Balance at January 25, 2026 | $ | (112,033) | $ | (141,530) | $ | 18,985 | $ | 1,554 | $ | (233,023) | ||||||||||||||||||||||||||||
(1) Included in computation of net periodic cost. See Note H - Pension and Other Postretirement Benefits for additional information.
(2) Included in Cost of Products Sold and Interest Expense. See Note G - Derivatives and Hedging for additional information.
(3) Included in Equity in Earnings of Affiliates.
NOTE J - FAIR VALUE MEASUREMENTS
Accounting guidance establishes a fair value hierarchy which requires assets and liabilities measured at fair value to be categorized into one of three levels based on the inputs used in the valuation. The three levels are defined as follows:
Level 1 Observable inputs based on quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 Observable inputs, other than those included in Level 1, based on quoted prices for similar assets and liabilities in active markets, or quoted prices for identical assets and liabilities in inactive markets.
Level 3 Unobservable inputs that reflect an entity’s own assumptions about what inputs a market participant would use in pricing the asset or liability based on the best information available in the circumstances.
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The Company’s financial assets and liabilities carried at fair value on a recurring basis and their level within the fair value hierarchy are presented in the tables below.
| Fair Value Measurements at January 25, 2026 | |||||||||||||||||||||||
In thousands | Total Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||||||||
| Assets at Fair Value | |||||||||||||||||||||||
Short-term Marketable Securities | $ | 33,302 | $ | 7,229 | $ | 26,073 | $ | — | |||||||||||||||
Other Trading Securities | 222,364 | — | 222,364 | — | |||||||||||||||||||
| 19,483 | 18,528 | 955 | — | ||||||||||||||||||||
| Total Assets at Fair Value | $ | 275,149 | $ | 25,757 | $ | 249,392 | $ | — | |||||||||||||||
| Liabilities at Fair Value | |||||||||||||||||||||||
Deferred Compensation | $ | 63,036 | $ | — | $ | 63,036 | $ | — | |||||||||||||||
| 4,360 | 3,837 | 523 | — | ||||||||||||||||||||
| Total Liabilities at Fair Value | $ | 67,396 | $ | 3,837 | $ | 63,559 | $ | — | |||||||||||||||
| Fair Value Measurements at October 26, 2025 | |||||||||||||||||||||||
In thousands | Total Fair Value | Quoted Prices in Active Markets for Identical Assets (Level 1) | Significant Other Observable Inputs (Level 2) | Significant Unobservable Inputs (Level 3) | |||||||||||||||||||
| Assets at Fair Value | |||||||||||||||||||||||
Short-term Marketable Securities | $ | 32,909 | $ | 6,944 | $ | 25,965 | $ | — | |||||||||||||||
Other Trading Securities | 219,197 | — | 219,197 | — | |||||||||||||||||||
| 9,888 | 9,212 | 676 | — | ||||||||||||||||||||
| Total Assets at Fair Value | $ | 261,994 | $ | 16,156 | $ | 245,838 | $ | — | |||||||||||||||
| Liabilities at Fair Value | |||||||||||||||||||||||
Deferred Compensation | $ | 63,582 | $ | — | $ | 63,582 | $ | — | |||||||||||||||
| 4,291 | 3,436 | 855 | — | ||||||||||||||||||||
| Total Liabilities at Fair Value | $ | 67,873 | $ | 3,436 | $ | 64,437 | $ | — | |||||||||||||||
The following methods and assumptions were used to estimate the fair value of the financial assets and liabilities above:
Short-term Marketable Securities: The Company holds securities as part of a portfolio maintained to generate investment income and to provide cash for operations of the Company, if necessary. The portfolio is managed by a third party who is responsible for daily trading activities, and all assets within the portfolio are highly liquid. The cash, U.S. government securities, and money market funds held by the portfolio are classified as Level 1. The current investment portfolio also includes corporate bonds and other asset-backed securities for which there is an active, quoted market. Market prices are obtained from a variety of industry providers, large financial institutions, and other third-party sources to calculate a representative daily market value, and therefore, these securities are classified as Level 2.
Deferred Compensation and Other Trading Securities: The Company maintains a rabbi trust to fund certain supplemental executive retirement plans and deferred compensation plans. These funds are maintained under a third-party insurance policy, and the funds' values represent their cash surrender value based on the fair value of the underlying investments in the account. These policies are classified as Level 2. The majority of the funds held in the rabbi trust relate to supplemental executive retirement plans and are invested in fixed income investments. The declared rate on these investments is set based on a formula using the yield of the general account investment portfolio supporting the fund, as adjusted for expenses and other charges. The rate is guaranteed for one year at issue and may be reset annually on the policy anniversary, subject to a guaranteed minimum rate. During the quarter ended January 25, 2026, investments held by the rabbi trust generated gains of $3.2 million compared to gains of $2.7 million for the quarter ended January 26, 2025.
Under the Company’s deferred compensation plans, participants can defer certain types of compensation and elect to receive a return based on the changes in fair value of various investment options, which include equity securities, money market accounts, bond funds, or other portfolios for which there is an active quoted market. The Company also offers a fixed rate investment option to participants. The rate earned on these investments is adjusted annually based on a specified percent of
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the U.S. Internal Revenue Service (IRS) applicable federal rates. These liabilities are classified as Level 2. The Company's funding in the rabbi trust related to deferred compensation plans generally mirrors the investment selections within the plans.
Commodity Derivatives: The Company’s commodity derivatives represent futures, swaps, and options contracts used in its hedging or other programs to offset price fluctuations associated with purchases of grain, natural gas, diesel fuel, lean hogs, and pork, and to minimize the price risk assumed when forward-priced contracts are offered to the Company’s commodity suppliers. The Company’s futures and options contracts for corn are traded on the Chicago Board of Trade, while futures contracts for lean hogs are traded on the Chicago Mercantile Exchange. These are active markets with quoted prices available, and these contracts are classified as Level 1. The Company holds natural gas, diesel fuel, and pork swap contracts that are over-the-counter instruments classified as Level 2. The value of the natural gas and diesel fuel swap contracts is calculated using quoted prices from the New York Mercantile Exchange, and the value of the pork swap contracts are calculated using a futures implied U.S. Department of Agriculture estimated pork cut-out value. All derivatives are reviewed for potential credit risk and risk of nonperformance.
The Company’s financial assets and liabilities also include cash and cash equivalents, accounts receivable, accounts payable, and other liabilities, for which carrying value approximates fair value due to their short-term maturities. The Company does not carry its long-term debt at fair value on the Consolidated Statements of Financial Position. The fair value of long-term debt, utilizing discounted cash flows (Level 2), was $2.5 billion as of January 25, 2026, and $2.6 billion as of October 26, 2025. See Note L - Long-term Debt and Other Borrowing Arrangements for additional information.
Nonrecurring Fair Value Measurements: The Company may be required to measure certain nonfinancial assets and liabilities including goodwill, intangible assets, equity method investments, and property, plant, and equipment at fair value on a nonrecurring basis. There were no material remeasurements of assets or liabilities at fair value on a nonrecurring basis subsequent to their initial recognition during the quarters ended January 25, 2026, and January 26, 2025.
NOTE K - COMMITMENTS AND CONTINGENCIES
During the quarter ended January 25, 2026, there were no material changes outside the ordinary course of business to the purchase commitments and other commitments and guarantees last disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended October 26, 2025.
Legal Proceedings: The Company is a party to various legal proceedings related to the ongoing operation of its business, including claims both by and against the Company. At any time, such proceedings typically involve claims related to product liability, labeling, contracts, antitrust regulations, intellectual property, competition laws, employment practices, or other actions brought by employees, customers, consumers, competitors, regulators, or suppliers. The Company establishes accruals for its potential exposure, as appropriate, for claims against the Company when losses become probable and reasonably estimable. However, future developments or settlements are uncertain and may require the Company to change such accruals as proceedings progress. Resolution of any currently known matter, either individually or in the aggregate, is not expected to have a material effect on the Company’s financial condition, results of operations, or liquidity.
Pork Antitrust Litigation
Beginning in June 2018, a series of class action complaints were filed against the Company, as well as several other pork-processing companies and a benchmarking service called Agri Stats, in the U.S. District Court for the District of Minnesota styled In re Pork Antitrust Litigation (the Pork Antitrust Litigation). The Class Plaintiffs alleged, among other things, that beginning in January 2009, the defendants conspired and combined to fix, raise, maintain, and stabilize the price of pork and pork products—including through the use of Agri Stats—in violation of federal antitrust laws. Since the original filing, certain plaintiffs opted out of class treatment and began proceeding with individual direct actions making similar claims (Non-Class Direct-Action Plaintiffs), including claims of violations of state antitrust laws. The plaintiffs seek treble damages, injunctive relief, pre- and post-judgment interest, costs, and attorneys’ fees.
Although the Company strongly denies liability, continues to deny the allegations asserted, and believes it has valid defenses, to avoid the uncertainty, risk, expense, and distraction of continued litigation, the Company executed settlement agreements providing for payments by the Company to the Class Plaintiffs and one Non-Class Direct-Action Plaintiff. For the Class Plaintiffs, the total settlement amount of $11.8 million was recorded as Accrued Expenses in the second quarter of fiscal 2024 and was paid during the second half of fiscal 2024. For the one Non-Class Direct-Action Plaintiff, the settlement amount of $0.2 million was recorded as Accrued Expenses in the first quarter of fiscal 2025 and was paid in the second quarter of fiscal 2025. All settlement amounts were recorded in Selling, General, and Administrative.
In the second quarter of fiscal 2025, the U.S. District Court for the District of Minnesota granted the Company’s Motion for Summary Judgment and dismissed the Company from the federal litigation. Certain defendants challenged the summary
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judgment decision, but the District Court largely denied the various motions. In November 2025, the Eighth Circuit Court of Appeals denied the defendants' petition to order the District Court to vacate its summary judgment decision.
The Company settled the only pending matter that involved state claims brought by one Non-Class Direct Action Plaintiff for non-monetary terms in November 2025.
Turkey Antitrust Litigation
Beginning in December 2019, a series of class action complaints were filed against the Company, as well as several other turkey-processing companies and a benchmarking service called Agri Stats, in the U.S. District Court for the Northern District of Illinois styled In re Turkey Antitrust Litigation. The plaintiffs allege, among other things, that from at least 2010 to 2017, the defendants conspired and combined to fix, raise, maintain, and stabilize the price of turkey products—including through the use of Agri Stats—in violation of federal antitrust laws. The complaints on behalf of the classes of indirect purchasers also include causes of action under various state unfair competition laws, consumer protection laws, and unjust enrichment common laws. The plaintiffs seek treble damages, injunctive relief, pre- and post-judgment interest, costs, and attorneys’ fees. Since the original filing, certain direct-action plaintiffs have opted out of class treatment and are proceeding with individual direct actions making similar claims, and others may do so in the future. The defendants' motions for summary judgment were submitted in January 2026. The Company has not recorded any liability for these matters as it does not believe a loss is probable. The Company cannot reasonably estimate any reasonably possible loss. The Company believes that it has valid and meritorious defenses against the allegations.
Tax Proceedings: Two current Company subsidiaries organized in Brazil, Clean Field Comércio de Produtos de Alimentícios LTDA and Omamori Indústria de Alimentos LTDA, along with a former subsidiary, Talis Distribuidora de Alimentos LTDA, which are reported in the International segment, have received tax deficiency notices from the State of São Paulo Tax Authority Office alleging underpayment of ICMS and ICMS-ST taxes, which are similar to value added taxes, for multiple tax years. The subsidiaries have filed objections to appeal these notices, and the proceedings are in various stages of the administrative review process. Any adverse outcomes at the administrative level are expected to be eligible for further appeal through judicial processes. The Company has not recorded any liability relating to these assessments and cannot reasonably estimate any reasonably possible loss at this time.
NOTE L - LONG-TERM DEBT AND OTHER BORROWING ARRANGEMENTS
Long-term Debt consists of:
In thousands | January 25, 2026 | October 26, 2025 | |||||||||
Senior Unsecured Notes with Interest at 3.050% Interest Due Semi-annually through June 2051 Maturity Date | $ | 600,000 | $ | 600,000 | |||||||
Senior Unsecured Notes with Interest at 1.800% Interest Due Semi-annually through June 2030 Maturity Date | 1,000,000 | 1,000,000 | |||||||||
Senior Unsecured Notes with Interest at 1.700% Interest Due Semi-annually through June 2028 Maturity Date | 750,000 | 750,000 | |||||||||
Senior Unsecured Notes with Interest at 4.800% Interest Due Semi-annually through March 2027 Maturity Date | 500,000 | 500,000 | |||||||||
| Unamortized Discount on Senior Notes | (5,638) | (5,848) | |||||||||
| Unamortized Debt Issuance Costs | (12,062) | (12,775) | |||||||||
| Finance Lease Liabilities | 22,378 | 23,122 | |||||||||
| Other Financing Arrangements | 2,814 | 2,924 | |||||||||
Total Debt | 2,857,492 | 2,857,424 | |||||||||
| Less: Current Maturities of Long-term Debt | 6,485 | 6,646 | |||||||||
| Long-term Debt Less Current Maturities | $ | 2,851,007 | $ | 2,850,778 | |||||||
Senior Unsecured Notes: On March 8, 2024, the Company issued senior notes in an aggregate principal amount of $500.0 million due March 2027. The notes bear interest at a fixed rate of 4.800% per annum. Interest accrues on the notes from March 8, 2024, and is payable semi-annually in arrears on March 30 and September 30 of each year, commencing September 30, 2024. The notes may be redeemed in whole or in part at any time at the applicable redemption prices. If a change of control triggering event occurs, the Company must offer to purchase the notes at a purchase price equal to 101% of their principal amount, plus accrued and unpaid interest, if any, to the date of purchase.
On June 3, 2021, the Company issued $750.0 million aggregate principal amount of its 1.700% notes due June 2028 (2028 Notes) and $600.0 million aggregate principal amount of its 3.050% notes due June 2051 (2051 Notes). The notes may be redeemed in whole or in part at any time at the applicable redemption price. Interest accrues per annum at the stated rates and is paid semi-annually in arrears on June 3 and December 3 of each year, commencing December 3, 2021. Interest rate risk was
17
hedged utilizing interest rate locks on the 2028 Notes and 2051 Notes. The Company lifted the hedges in conjunction with the issuance of these notes. See Note G - Derivatives and Hedging for additional information. If a change of control triggering event occurs, the Company must offer to purchase the notes at a purchase price equal to 101% of their principal amount, plus accrued and unpaid interest, if any, to the date of purchase.
On June 11, 2020, the Company issued senior notes in an aggregate principal amount of $1.0 billion due June 2030. The notes bear interest at a fixed rate of 1.800% per annum, with interest paid semi-annually in arrears on June 11 and December 11 of each year, commencing December 11, 2020. The notes may be redeemed in whole or in part at any time at the applicable redemption prices. If a change of control triggering event occurs, the Company must offer to purchase the notes at a purchase price equal to 101% of their principal amount, plus accrued and unpaid interest, if any, to the date of purchase.
Unsecured Revolving Credit Facility: On March 25, 2025, the Company entered into an unsecured revolving credit agreement with Wells Fargo Bank, National Association, as administrative agent, swing line lender and issuing lender, U.S. Bank National Association, JPMorgan Chase Bank, N.A., and BofA Securities, Inc., as syndication agents, and the lenders party thereto. The revolving credit agreement provides for an unsecured revolving credit facility with an aggregate principal commitment amount at any time outstanding of up to $750.0 million with an uncommitted increase option of an additional $375.0 million upon the satisfaction of certain conditions.
Interest on funds borrowed under the revolving credit agreement will be charged, depending on the applicable currency, at either a risk-free rate, as defined in the revolving credit agreement (with borrowings in U.S. dollars at the Term Secured Overnight Financing Rate) or a Eurocurrency rate for certain foreign currencies or a base rate with respect to U.S. dollars to be selected by the Company at the time of borrowing plus an applicable margin of 0.575% to 1.160% for Eurocurrency rate loans and 0.0% to 0.160% for base rate loans, depending on the Company’s debt rating issued by S&P and Moody’s. A variable fee of 0.050% to 0.090% is paid for the availability of this credit line. Extensions of credit under the facility may be made in the form of revolving loans, swing line loans, and letters of credit. The lending commitments under the agreement are scheduled to expire on March 25, 2030, at which time the Company will be required to pay in full all obligations then outstanding. The Company had no outstanding borrowings from this facility as of January 25, 2026, and October 26, 2025.
Debt Covenants: The Company is required by certain covenants in its debt agreements to maintain specified levels of financial ratios and financial position, including maintaining a minimum interest coverage ratio. As of January 25, 2026, the Company was in compliance with all covenants.
NOTE M - INCOME TAXES
The Company’s tax provision is determined using an estimated annual effective tax rate and adjusted for discrete taxable events that may occur during the quarter. The effects of tax legislation are recognized in the period in which the law is enacted. The deferred tax assets and liabilities are remeasured using enacted tax rates expected to apply to taxable income in the years the related temporary differences are anticipated to reverse.
The Company’s effective tax rate was 22.4% and 21.8% for the quarters ended January 25, 2026, and January 26, 2025, respectively. The change was primarily due to increased stock option expirations in the quarter ended January 25, 2026.
Unrecognized tax benefits, if recognized as of January 25, 2026, would impact the Company’s effective tax rate by $16.8 million compared to $16.7 million as of January 26, 2025. The Company includes accrued interest and penalties related to uncertain tax positions in Provision for Income Taxes, with immaterial expenses included during the quarters ended January 25, 2026, and January 26, 2025. The amount of accrued interest and penalties associated with unrecognized tax benefits was $2.9 million at January 25, 2026, and $2.6 million at January 26, 2025.
Tax Examinations: The Company is regularly audited by federal, state, and foreign taxing authorities.
The Company has elected to participate in the IRS Compliance Assurance Process (CAP) through fiscal 2027. The objective of CAP is to contemporaneously work with the IRS to achieve federal tax compliance and resolve all or most of the issues prior to filing of the tax return. The Company may elect to continue participating in CAP for future tax years; the Company may withdraw from the program at any time. Current fiscal years under IRS CAP examination are 2025 and 2026.
The Company is in various stages of audit by several state taxing authorities on a variety of fiscal years, as far back as 2019. While it is reasonably possible that one or more of these audits may be completed within the next 12 months and the related unrecognized tax benefits may change based on the status of the examinations, as of January 25, 2026, it was not possible to reasonably estimate the effect of any amount of such change to previously recorded uncertain tax positions.
18
The Company is subject to various examinations by foreign tax authorities. With limited exceptions, the Company is no longer subject to foreign tax examinations for fiscal years prior to 2018. See Note K - Commitments and Contingencies for additional information.
Tax Legislation: On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law. OBBBA includes income tax provisions such as a permanent extension of certain provisions of the Tax Cuts and Jobs Act, elective deductions for domestic research and development, reinstatement of 100% first-year bonus depreciation, and modifications to the international tax framework. The Company assessed the provisions of OBBBA and determined the changes were not material to the Company's tax provision, and does not expect a material impact on the Company's consolidated financial statements in future reporting periods.
The Organization for Economic Cooperation and Development published a framework for Pillar Two of the Global Anti-Base Erosion Rules, which is designed to coordinate participating jurisdictions in updating the international tax system to ensure that large multinational companies pay a minimum tax of 15%. Many countries have enacted, or begun the process of enacting, laws based on the Pillar Two framework. The Company considered the applicable tax laws in relevant jurisdictions and concluded the impact of Pillar Two was not material to the Company's tax provision for the quarter ended January 25, 2026. The Company will continue to evaluate the impact of such legislative changes but does not expect the new tax laws to have a material impact on the Company’s consolidated financial statements in future reporting periods.
NOTE N - EARNINGS PER SHARE DATA
The reported net earnings attributable to the Company were used when computing basic and diluted earnings per share. Diluted earnings per share was calculated using the treasury stock method. The shares used as the denominator for those computations are as follows:
| Quarter Ended | |||||||||||
In thousands | January 25, 2026 | January 26, 2025 | |||||||||
Basic Weighted-average Shares Outstanding | 550,477 | 549,460 | |||||||||
| Dilutive Potential Common Shares | 229 | 395 | |||||||||
Diluted Weighted-average Shares Outstanding | 550,706 | 549,854 | |||||||||
| Antidilutive Potential Common Shares | 17,733 | 19,778 | |||||||||
NOTE O - SEGMENT REPORTING
Segment Results: The Company develops, processes, and distributes a wide array of food products in a variety of markets. The Company reports its results in the following three segments: Retail, Foodservice, and International.
The Retail segment consists primarily of the processing, marketing, and sale of food products sold predominantly in retail channels, including grocery stores, mass merchandisers, club stores, natural food chains, drug, dollar and discount chains, and e-commerce providers in the U.S. This segment also includes the results from the Company’s MegaMex Foods joint venture.
The Foodservice segment consists primarily of the processing, marketing, and sale of food products to distributors and operators across a wide range of providers of food away from home, including restaurants, hospitality, healthcare, K-12, college and universities, and convenience stores in the U.S.
The International segment processes, markets, and sells the Company's products through retail and foodservice channels internationally. This segment also includes the results from the Company’s international joint ventures, equity method investments, and royalty arrangements, as well as operations in China and Brazil.
The results of each segment are regularly provided to the Company's Interim Chief Executive Officer, who is the chief operating decision maker (CODM). The CODM primarily uses net sales and segment profit to compare results to the prior year, annual operating plan, and periodic forecasts when evaluating segment performance and allocating resources.
The accounting policies of the segments are generally the same as those presented in Note A - Summary of Significant Accounting Policies in the Company’s Annual Report on Form 10-K for the fiscal year ended October 26, 2025. Intersegment sales are eliminated in consolidation and are not reviewed when evaluating segment performance. Segment profit also excludes unallocated general corporate expenses, deferred compensation, non-recurring expenses associated with the Transform and
19
Modernize initiative, corporate restructuring plan costs, 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.
Segment results, including the significant expense categories regularly provided to the CODM, are provided below. Certain portions of these expenses are retained at the corporate level and are presented in Net Unallocated Expense. The Company is an integrated enterprise, characterized by substantial intersegment cooperation, cost allocations, and sharing of assets. The Company does not represent that these segments, if operated independently, would report the profit and other financial information shown.
| Quarter Ended January 25, 2026 | ||||||||||||||||||||||||||
| In thousands | Retail | Foodservice | International | Total | ||||||||||||||||||||||
| Net Sales | $ | 1,847,806 | $ | 998,227 | $ | 181,284 | ||||||||||||||||||||
| Cost of Products Sold | 1,619,712 | 794,438 | 142,885 | |||||||||||||||||||||||
| Selling, General, and Administrative | 140,846 | 47,248 | 22,345 | |||||||||||||||||||||||
| Equity in Earnings of Affiliates | 8,942 | — | 6,824 | |||||||||||||||||||||||
| Noncontrolling Interest (Earnings) Loss | — | — | 32 | |||||||||||||||||||||||
| Segment Profit | $ | 96,190 | $ | 156,541 | $ | 22,910 | $ | 275,641 | ||||||||||||||||||
| Net Unallocated Expense | 41,298 | |||||||||||||||||||||||||
| Noncontrolling Interest Earnings (Loss) | (32) | |||||||||||||||||||||||||
| Earnings Before Income Taxes | $ | 234,312 | ||||||||||||||||||||||||
| Quarter Ended January 26, 2025 | ||||||||||||||||||||||||||
| In thousands | Retail | Foodservice | International | Total | ||||||||||||||||||||||
| Net Sales | $ | 1,890,133 | $ | 930,185 | $ | 168,495 | ||||||||||||||||||||
| Cost of Products Sold | 1,640,761 | 743,519 | 129,053 | |||||||||||||||||||||||
| Selling, General, and Administrative | 139,528 | 47,840 | 25,170 | |||||||||||||||||||||||
| Equity in Earnings of Affiliates | 9,303 | — | 6,527 | |||||||||||||||||||||||
| Noncontrolling Interest (Earnings) Loss | — | — | 45 | |||||||||||||||||||||||
| Segment Profit | $ | 119,147 | $ | 138,826 | $ | 20,845 | $ | 278,818 | ||||||||||||||||||
| Net Unallocated Expense | 60,700 | |||||||||||||||||||||||||
| Noncontrolling Interest Earnings (Loss) | (45) | |||||||||||||||||||||||||
| Earnings Before Income Taxes | $ | 218,073 | ||||||||||||||||||||||||
The Company’s CODM reviews assets and capital expenditures at a consolidated level and does not use assets by segment to evaluate performance or allocate resources. Therefore, the Company does not disclose these measures by segment. Depreciation and amortization expense is included in the measure of segment profit and disclosed below.
| In thousands | Quarter Ended | |||||||||||||
| January 25, 2026 | January 26, 2025 | |||||||||||||
| Depreciation and Amortization | ||||||||||||||
| Retail | $ | 35,563 | $ | 36,210 | ||||||||||
| Foodservice | 20,797 | 19,952 | ||||||||||||
| International | 4,566 | 4,332 | ||||||||||||
| Corporate | 6,168 | 5,379 | ||||||||||||
| Total Depreciation and Amortization | $ | 67,095 | $ | 65,872 | ||||||||||
Disaggregated Revenues: The Company’s products primarily consist of meat and other food products. Total revenue contributed by classes of similar products are:
| Quarter Ended | ||||||||||||||
| In thousands | January 25, 2026 | January 26, 2025 | ||||||||||||
| Perishable | $ | 2,238,330 | $ | 2,151,822 | ||||||||||
| Shelf-stable | 788,987 | 836,991 | ||||||||||||
| Total Net Sales | $ | 3,027,317 | $ | 2,988,813 | ||||||||||
20
Perishable includes fresh meats, frozen items, refrigerated meal solutions, bacon, sausages, hams, guacamole, and other items that require refrigeration. Shelf-stable includes canned luncheon meats, nut butters, snack nuts, chili, shelf-stable microwaveable meals, hash, stews, tortillas, salsas, tortilla chips, and other items that do not require refrigeration.
NOTE P - RESTRUCTURING
The Company is undertaking a corporate restructuring plan designed to reduce administrative expenses, improve efficiencies, and align its workforce to the Company’s future needs, while enabling continued investment in the Company’s growth. The restructuring includes a voluntary early retirement program for certain groups of employees, the closing of certain open roles, involuntary role reductions, and making select changes to benefit programs. The Company expects to incur restructuring charges of approximately $22.0 million for one-time pension benefits, cash severance payments, other employee benefit costs, and professional fees. The charges were primarily recognized in the fourth quarter of fiscal 2025 and the first quarter of fiscal 2026. Of the estimated charges, the Company expects that approximately $9.0 million will be cash expenditures during fiscal 2026.
The Company recognized $8.5 million of costs associated with restructuring activities during the first quarter of fiscal 2026. There were no restructuring costs recognized during the first quarter of fiscal 2025. All costs are unallocated corporate expenses which are not included in any of the reportable segments' measure of segment profit. A summary of these costs by type is as follows:
| In thousands | Location on Consolidated Statements of Operations | Quarter Ended January 25, 2026 | Total Plan Costs | ||||||||
| Cash Severance | Selling, General, and Administrative | $ | 6,721 | $ | 6,721 | ||||||
| Employee Benefits | Selling, General, and Administrative | 1,342 | 1,342 | ||||||||
| Professional Fees | Selling, General, and Administrative | 413 | 1,007 | ||||||||
| Pension Benefits | Other Income (Expense), Net | — | 12,696 | ||||||||
| Total Restructuring Costs | $ | 8,476 | $ | 21,767 | |||||||
The liability for cash severance and employee benefits was recorded in Employee-related Expenses and the liability for professional fees was recorded in Accounts Payable. The reconciliation of the beginning and ending liability balances showing activity during the year is as follows:
| In thousands | Cash Severance | Employee Benefits | Professional Fees | Total | |||||||||||||
Liability Balances at October 26, 2025 | $ | — | $ | — | $ | 594 | $ | 594 | |||||||||
| Costs Incurred and Charged to Expense | 6,721 | 1,342 | 413 | 8,476 | |||||||||||||
| Costs Paid or Otherwise Settled | (6,282) | (1,034) | (794) | (8,110) | |||||||||||||
Liability Balances at January 25, 2026 | $ | 440 | $ | 308 | $ | 213 | $ | 961 | |||||||||
Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Overview
The Company is a global manufacturer and marketer of branded food products and remains focused on driving long-term growth through a balanced business model, a diverse portfolio, and a commitment to creating value for all stakeholders. The Company’s three reportable segments, Retail, Foodservice, and International, are described in Note O - Segment Reporting in the Notes to the Consolidated Financial Statements in this Quarterly Report on Form 10-Q.
The Company discloses certain measures not defined by United States (U.S.) Generally Accepted Accounting Principles (GAAP), including organic volume, organic net sales, adjusted selling, general and administrative (SG&A), adjusted SG&A as a percent of net sales, adjusted earnings before income taxes, and adjusted diluted earnings per share. The Company utilizes these non-GAAP measures to understand and evaluate operating performance on a consistent basis. For additional information and reconciliations to the most closely comparable measures calculated in accordance with GAAP, see the "Non-GAAP Measures" section of this Item.
Diluted earnings per share was $0.33 for the first quarter of fiscal 2026, up 6 percent compared to the same period last year. Adjusted diluted earnings per share for the first quarter of fiscal 2026 was $0.34, down 3 percent compared to the same period last year. Significant factors impacting the quarter are listed below. All comparisons are to the same period of the prior year unless otherwise noted.
21
•Net sales for the first quarter of fiscal 2026 increased 1 percent. Organic net sales increased 2 percent with growth from the Foodservice and International segments and lower organic net sales from the Retail segment.
•Total segment profit for the first quarter of fiscal 2026 decreased 1 percent. Segment profit increased in both Foodservice and International and was more than offset by the decline in the Retail segment.
◦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 segment profit increased in the first quarter of fiscal 2026, driven primarily by the benefit from pricing actions.
◦International segment profit increased in the first quarter of fiscal 2026, as lower export margins were offset by lower SG&A and growth in China.
•Earnings before income taxes for the first quarter of fiscal 2026 increased 7 percent, as the benefits from higher net sales and the $23.5 million gain on the sale of our controlling equity interest in Justin's, LLC were partially offset by higher cost of products sold. Adjusted earnings before income taxes decreased 2 percent.
•The pre-tax impact of non-recurring expenses related to the Company’s Transform and Modernize (T&M) initiative, corporate restructuring plan, and a consulting agreement with a former executive (Consulting Agreement) in the first quarter of fiscal 2026 were $27.2 million, which was primarily recorded in SG&A.
•Cash flow from operations was $349 million for the first quarter of fiscal 2026, a 13 percent increase largely due to a reduction in inventory.
During the first quarter of fiscal 2026, the Company observed increased logistics costs amid a tightening of available freight capacity, largely driven by winter weather disruptions and industry dynamics. Such cost pressures contributed to higher expenses in the first quarter of fiscal 2026. If logistics costs continue to rise or remain elevated, such conditions could increase the Company’s expenses and have an adverse impact on the Company’s results of operations. The Company will continue to monitor these conditions and evaluate any potential impact on future periods.
Changes in global trade policies, including tariffs and retaliatory tariffs, had a minor impact on the Company's results of operations during the first quarter of fiscal 2026. The Company continues to monitor and evaluate the impact of proposed and enacted tariffs, including proposed and enacted retaliatory tariffs, and other trade restrictions, as well as its ability to mitigate their impacts.
Consolidated Results
Volume, Net Sales, Earnings, and Diluted Earnings Per Share
| Quarter Ended | |||||||||||||||||
In thousands, except per share amounts | January 25, 2026 | January 26, 2025 | % Change | ||||||||||||||
| Volume (lbs.) | 1,013,764 | 1,055,308 | (3.9) | ||||||||||||||
Organic Volume (lbs.) | 1,013,764 | 1,053,805 | (3.8) | ||||||||||||||
| Net Sales | $ | 3,027,317 | $ | 2,988,813 | 1.3 | ||||||||||||
Organic Net Sales | 3,027,317 | 2,980,277 | 1.6 | ||||||||||||||
Net Earnings Attributable to Hormel Foods Corporation | 181,801 | 170,575 | 6.6 | ||||||||||||||
| Diluted Earnings Per Share | 0.33 | 0.31 | 6.5 | ||||||||||||||
Adjusted Diluted Earnings Per Share | 0.34 | 0.35 | (2.9) | ||||||||||||||
Volume and Net Sales
Net Sales increased for the first quarter of fiscal 2026 while volume decreased compared to the prior year.
For the first quarter of fiscal 2026, organic net sales growth across the enterprise were led by the Foodservice and International segments offset by declines in the Retail segment. Strong performance in our multinational businesses and our Foodservice customized solutions business, partially offset by the strategic exit from select non-core private label snack nut items, were the key drivers of net sales growth.
For the first quarter of fiscal 2026, organic volume increased marginally in the International segment, was comparable to the prior year in the Foodservice segment, and declined in the Retail segment, primarily driven by the strategic exit from select non-core private label snack nut items.
22
In fiscal 2026, the Company expects net sales growth, which assumes growth across a broad range of categories, increased brand support, and market-based pricing actions. Risks to this outlook include slowing consumer demand and commodity price fluctuations.
Cost of Products Sold
| Quarter Ended | |||||||||||||||||
In thousands | January 25, 2026 | January 26, 2025 | % Change | ||||||||||||||
| Cost of Products Sold | $ | 2,557,742 | $ | 2,513,581 | 1.8 | ||||||||||||
Cost of products sold for the first quarter of fiscal 2026 increased, primarily due to higher logistics expenses and higher commodity input costs, mainly for beef, pork trim, and nuts.
On a per pound basis, cost of products sold for the first quarter of fiscal 2026 increased compared to the prior year.
Gross Profit
| Quarter Ended | |||||||||||||||||
In thousands | January 25, 2026 | January 26, 2025 | % Change | ||||||||||||||
| Gross Profit | $ | 469,575 | $ | 475,232 | (1.2) | ||||||||||||
| Percent of Net Sales | 15.5 | % | 15.9 | % | |||||||||||||
For the first quarter of fiscal 2026, gross profit as a percent of net sales declined as gross profit improvement from the Foodservice segment was more than offset by declines in Retail and International. All segments benefited from market-based pricing actions and savings generated through the Company’s T&M initiative, which were offset by inflationary pressures.
Selling, General, and Administrative (SG&A)
| Quarter Ended | |||||||||||||||||
In thousands | January 25, 2026 | January 26, 2025 | % Change | ||||||||||||||
| SG&A | $ | 241,698 | $ | 263,013 | (8.1) | ||||||||||||
| Percent of Net Sales | 8.0 | % | 8.8 | % | |||||||||||||
Adjusted SG&A | $ | 238,412 | $ | 237,481 | 0.4 | ||||||||||||
Adjusted Percent of Net Sales | 7.9 | % | 7.9 | % | |||||||||||||
For the first quarter of fiscal 2026, SG&A and SG&A as a percent of net sales decreased. The gain on the sale of the controlling equity interest in Justin’s, LLC and the lapping of a loss on the sale of a non-core sow operation in fiscal 2025 were partially offset by expenses associated with the corporate restructuring plan and Consulting Agreement. Adjusted SG&A was comparable to the prior year, as a reduction in marketing and advertising was offset by higher employee-related and legal expenses.
Advertising investments in the first quarter of fiscal 2026 were $41 million, a decrease of 6 percent compared to the prior year. In fiscal 2026, the Company intends to continue investing in its priority brands and for the full-year advertising expense to increase compared to the prior year.
Equity in Earnings of Affiliates
| Quarter Ended | |||||||||||||||||
| In thousands | January 25, 2026 | January 26, 2025 | % Change | ||||||||||||||
| Equity in Earnings of Affiliates | $ | 15,820 | $ | 16,111 | (1.8) | ||||||||||||
Equity in earnings of affiliates for the first quarter of fiscal 2026 decreased due to the results of MegaMex Foods, LLC, which were partially offset by favorable results from international investments.
23
Interest Income, Interest Expense, and Other Income (Expense), Net
| Quarter Ended | |||||||||||||||||
| In thousands | January 25, 2026 | January 26, 2025 | % Change | ||||||||||||||
Interest Income | $ | 6,528 | $ | 7,543 | (13.5) | ||||||||||||
| Interest Expense | 19,728 | 19,462 | 1.4 | ||||||||||||||
Other Income (Expense), Net | 3,815 | 1,661 | 129.6 | ||||||||||||||
Interest income declined in the first quarter of fiscal 2026, primarily due to lower interest rates. Interest expense marginally increased in the first quarter. Other income increased in the first quarter of fiscal 2026, primarily attributable to lower pension costs.
Effective Tax Rate
| Quarter Ended | |||||||||||
| January 25, 2026 | January 26, 2025 | ||||||||||
| Effective Tax Rate | 22.4 | % | 21.8 | % | |||||||
The effective tax rate in the first quarter of fiscal 2026 was 22.4% compared to 21.8% for the prior year, primarily due to an increase in stock option expirations in the first quarter of fiscal 2026. For additional information, refer to Note M - Income Taxes of the Notes to the Consolidated Financial Statements.
The effective tax rate for fiscal 2026 is expected to be between 21.5 and 22.5 percent.
Segment Results
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.
| Quarter Ended | |||||||||||||||||
In thousands | January 25, 2026 | January 26, 2025 | % Change | ||||||||||||||
| Net Sales | |||||||||||||||||
| Retail | $ | 1,847,806 | $ | 1,890,133 | (2.2) | ||||||||||||
| Foodservice | 998,227 | 930,185 | 7.3 | ||||||||||||||
| International | 181,284 | 168,495 | 7.6 | ||||||||||||||
Total Net Sales | $ | 3,027,317 | $ | 2,988,813 | 1.3 | ||||||||||||
| Segment Profit | |||||||||||||||||
| Retail | $ | 96,190 | $ | 119,147 | (19.3) | ||||||||||||
| Foodservice | 156,541 | 138,826 | 12.8 | ||||||||||||||
| International | 22,910 | 20,845 | 9.9 | ||||||||||||||
Total Segment Profit | 275,641 | 278,818 | (1.1) | ||||||||||||||
Net Unallocated Expense | 41,298 | 60,700 | (32.0) | ||||||||||||||
Noncontrolling Interest | (32) | (45) | 30.1 | ||||||||||||||
Earnings Before Income Taxes | $ | 234,312 | $ | 218,073 | 7.4 | ||||||||||||
24
Retail
| Quarter Ended | |||||||||||||||||
In thousands | January 25, 2026 | January 26, 2025 | % Change | ||||||||||||||
| Volume (lbs.) | 693,884 | 736,886 | (5.8) | ||||||||||||||
Organic Volume (lbs.) | 693,884 | 735,472 | (5.7) | ||||||||||||||
| Net Sales | $ | 1,847,806 | $ | 1,890,133 | (2.2) | ||||||||||||
Organic Net Sales | 1,847,806 | 1,882,212 | (1.8) | ||||||||||||||
| Segment Profit | 96,190 | 119,147 | (19.3) | ||||||||||||||
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
| Quarter Ended | |||||||||||||||||
In thousands | January 25, 2026 | January 26, 2025 | % Change | ||||||||||||||
| Volume (lbs.) | 244,419 | 243,853 | 0.2 | ||||||||||||||
Organic Volume (lbs.) | 244,419 | 243,777 | 0.3 | ||||||||||||||
| Net Sales | $ | 998,227 | $ | 930,185 | 7.3 | ||||||||||||
Organic Net Sales | 998,227 | 929,679 | 7.4 | ||||||||||||||
| Segment Profit | 156,541 | 138,826 | 12.8 | ||||||||||||||
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
| Quarter Ended | |||||||||||||||||
In thousands | January 25, 2026 | January 26, 2025 | % Change | ||||||||||||||
| Volume (lbs.) | 75,461 | 74,569 | 1.2 | ||||||||||||||
| Organic Volume (lbs.) | 75,461 | 74,556 | 1.2 | ||||||||||||||
| Net Sales | $ | 181,284 | $ | 168,495 | 7.6 | ||||||||||||
| Organic Net Sales | 181,284 | 168,386 | 7.7 | ||||||||||||||
| Segment Profit | 22,910 | 20,845 | 9.9 | ||||||||||||||
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.
25
Unallocated Income and Expense
| Quarter Ended | |||||||||||
In thousands | January 25, 2026 | January 26, 2025 | |||||||||
| Net Unallocated Expense | $ | 41,298 | $ | 60,700 | |||||||
| Noncontrolling Interest | (32) | (45) | |||||||||
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.
Related Party Transactions
There has been no material change in the information regarding Related Party Transactions as disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended October 26, 2025.
Non-GAAP Measures
This report includes measures of financial performance that are not defined by GAAP. The Company utilizes these non-GAAP measures to understand and evaluate operating performance on a consistent basis. These measures may also be used when making decisions regarding resource allocation and in determining incentive compensation. The Company believes these non-GAAP measures provide useful information to investors because they aid analysis and understanding of the Company’s results and business trends relative to past performance and the Company’s competitors. Non-GAAP measures are not intended to be a substitute for GAAP measures in analyzing financial performance. These non-GAAP measures are not calculated in accordance with GAAP and may be different from non-GAAP measures used by other companies.
Transform and Modernize (T&M) Initiative
In the fourth quarter of fiscal 2023, the Company announced a multi-year T&M initiative. In presenting non-GAAP measures, the Company adjusts for (i.e., excludes) expenses for this initiative that are non-recurring, which are primarily project-based external consulting fees and expenses related to supply chain and portfolio optimization (e.g., asset write-offs, severance, or relocation-related costs). The Company believes that non-recurring costs associated with the T&M initiative are not reflective of the Company’s ongoing operating cost structure; therefore, the Company is excluding these discrete costs. The Company does not adjust for (i.e., does not exclude) certain costs related to the T&M initiative that are expected to continue after the project ends, such as software license fees and internal employee expenses, because those costs are considered ongoing in nature as a component of normal operating costs. The Company also does not adjust for savings realized through the T&M initiative as these are considered ongoing in nature and reflective of expected future operating performance.
Gain or Loss on Sale of Business
In the first quarter of fiscal 2026, the Company sold 51% of its equity interest in Justin's, LLC, resulting in a gain on the sale. In the first quarter of fiscal 2025, the Company sold Mountain Prairie, LLC, a non-core sow operation, resulting in a loss on the sale. The Company believes the one-time impacts from these sales are not reflective of the Company’s ongoing operating cost structure, are not indicative of the Company’s core operating performance, and are not meaningful when comparing the Company’s operating performance against that of prior periods. Thus, the Company has adjusted for (i.e., excluded) these impacts.
Legal Matters
From time to time, the Company receives proceeds or incurs expenses related to discrete legal matters that the Company believes are not indicative of the Company’s core operating performance, do not reflect expected future operating income or costs, and are not meaningful when comparing the Company’s operating performance against that of prior periods. The Company adjusts for (i.e., excludes) these impacts.
Litigation Settlements
In fiscal 2025, the Company entered into a settlement agreement with a plaintiff in a pending antitrust litigation. See Note K - Commitments and Contingencies of the Notes to the Consolidated Financial Statements for additional information.
Corporate Restructuring Plan
In the fourth quarter of fiscal 2025, the Company commenced a corporate restructuring plan, the focus of which is to reduce administrative expenses, improve efficiencies, and align the workforce to the Company’s future needs, while enabling
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continued investment in the Company’s growth. The costs incurred to execute the corporate restructuring plan and the charges incurred under the program are primarily related to severance and employee benefit costs. Because the Company believes the charges incurred under the corporate restructuring plan do not reflect future operating costs and are not meaningful when comparing the Company's operating performance against that of prior periods, the Company adjusts for (i.e., excludes) these impacts. See Note P - Restructuring of the Notes to the Consolidated Financial Statements for additional information.
Consulting Agreement
On October 27, 2025, the Company entered into an agreement with its former Chief Executive Officer (CEO), pursuant to which the former CEO is expected to provide consulting services to the Company until April 2027. Consulting costs related to the agreement include cash and share-based compensation, which were primarily recognized in the first quarter of fiscal 2026. The Company believes non-recurring costs associated with the Consulting Agreement are not reflective of the Company’s ongoing operating cost structure, are not indicative of the Company’s core operating performance, and are not meaningful when comparing the Company’s operating performance against that of prior periods; therefore, the Company is excluding these discrete costs.
The tables below show the calculations to reconcile from the GAAP measures to the non-GAAP measures presented in this Quarterly Report on Form 10-Q. The tax provision expense or benefit of each of the pre-tax items excluded from the Company's GAAP results was computed based on the facts and tax implications associated with each item.
| Quarter Ended | |||||||||||
| In thousands, except per share amounts | January 25, 2026 | January 26, 2025 | |||||||||
| Cost of Products Sold (GAAP) | $ | 2,557,742 | $ | 2,513,581 | |||||||
Transform and Modernize Initiative(1) | (382) | (186) | |||||||||
| Adjusted Cost of Products Sold (Non-GAAP) | $ | 2,557,360 | $ | 2,513,395 | |||||||
| SG&A (GAAP) | $ | 241,698 | $ | 263,013 | |||||||
Transform and Modernize Initiative(2) | (10,543) | (13,968) | |||||||||
| Gain (Loss) on Sale of Business | 23,508 | (11,324) | |||||||||
| Corporate Restructuring Plan | (8,476) | — | |||||||||
| Consulting Agreement | (7,775) | — | |||||||||
| Litigation Settlements | — | (240) | |||||||||
| Adjusted SG&A (Non-GAAP) | $ | 238,412 | $ | 237,481 | |||||||
| Operating Income (GAAP) | $ | 243,697 | $ | 228,330 | |||||||
Transform and Modernize Initiative(1)(2) | 10,925 | 14,155 | |||||||||
| (Gain) Loss on Sale of Business | (23,508) | 11,324 | |||||||||
| Corporate Restructuring Plan | 8,476 | — | |||||||||
| Consulting Agreement | 7,775 | — | |||||||||
| Litigation Settlements | — | 240 | |||||||||
| Adjusted Operating Income (Non-GAAP) | $ | 247,364 | $ | 254,049 | |||||||
| Earnings Before Income Taxes (GAAP) | $ | 234,312 | $ | 218,073 | |||||||
Transform and Modernize Initiative(1)(2) | 10,925 | 14,155 | |||||||||
| (Gain) Loss on Sale of Business | (23,508) | 11,324 | |||||||||
| Corporate Restructuring Plan | 8,476 | — | |||||||||
| Consulting Agreement | 7,775 | — | |||||||||
| Litigation Settlements | — | 240 | |||||||||
| Adjusted Earnings Before Income Taxes (Non-GAAP) | $ | 237,979 | $ | 243,791 | |||||||
| Provision for Income Taxes (GAAP) | $ | 52,542 | $ | 47,543 | |||||||
Transform and Modernize Initiative(1)(2) | 2,677 | 3,086 | |||||||||
| (Gain) Loss on Sale of Business | (5,760) | 2,469 | |||||||||
| Corporate Restructuring Plan | 2,077 | — | |||||||||
| Consulting Agreement | — | — | |||||||||
| Litigation Settlements | — | 52 | |||||||||
| Adjusted Provision for Income Taxes (Non-GAAP) | $ | 51,536 | $ | 53,149 | |||||||
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| Quarter Ended | |||||||||||
| In thousands, except per share amounts | January 25, 2026 | January 26, 2025 | |||||||||
| Net Earnings Attributable to Hormel Foods Corporation (GAAP) | $ | 181,801 | $ | 170,575 | |||||||
Transform and Modernize Initiative(1)(2) | 8,248 | 11,069 | |||||||||
| (Gain) Loss on Sale of Business | (17,749) | 8,855 | |||||||||
| Corporate Restructuring Plan | 6,400 | — | |||||||||
| Consulting Agreement | 7,775 | — | |||||||||
| Litigation Settlements | — | 188 | |||||||||
| Adjusted Net Earnings Attributable to Hormel Foods Corporation (Non-GAAP) | $ | 186,475 | $ | 190,687 | |||||||
Diluted Earnings Per Share (GAAP) | $ | 0.33 | $ | 0.31 | |||||||
Transform and Modernize Initiative(1)(2) | 0.01 | 0.02 | |||||||||
| (Gain) Loss on Sale of Business | (0.03) | 0.02 | |||||||||
| Corporate Restructuring Plan | 0.01 | — | |||||||||
| Consulting Agreement | 0.01 | — | |||||||||
| Litigation Settlements | — | — | |||||||||
Adjusted Diluted Earnings Per Share (Non-GAAP) | $ | 0.34 | $ | 0.35 | |||||||
| Quarter Ended | |||||||||||
| January 25, 2026 | January 26, 2025 | ||||||||||
| SG&A as a Percent of Net Sales (GAAP) | 8.0 | % | 8.8 | % | |||||||
Transform and Modernize Initiative(2) | (0.3) | (0.5) | |||||||||
| Gain (Loss) on Sale of Business | 0.8 | (0.4) | |||||||||
| Corporate Restructuring Plan | (0.3) | — | |||||||||
| Consulting Agreement | (0.3) | — | |||||||||
| Litigation Settlements | — | — | |||||||||
| Adjusted SG&A as a Percent of Net Sales (Non-GAAP) | 7.9 | % | 7.9 | % | |||||||
(1) Comprised primarily of asset write-offs and severance related to supply chain and portfolio optimization.
(2) Comprised primarily of project-based external consulting fees.
ORGANIC VOLUME AND ORGANIC NET SALES (NON-GAAP)
The non-GAAP measures of organic volume and organic net sales are presented to provide investors with additional information to facilitate the comparison of past and present operations. Organic volume and organic net sales exclude the impact of the sale of the Company's controlling equity interest in Justin's, LLC in the first quarter of fiscal 2026.
| Quarter Ended | |||||||||||||||||||||||
| January 25, 2026 | January 26, 2025 | ||||||||||||||||||||||
| In thousands | GAAP | GAAP | Divestiture | Non-GAAP Organic | Non-GAAP % Change | ||||||||||||||||||
| Volume (lbs.) | |||||||||||||||||||||||
| Retail | 693,884 | 736,886 | (1,413) | 735,472 | (5.7) | ||||||||||||||||||
| Foodservice | 244,419 | 243,853 | (77) | 243,777 | 0.3 | ||||||||||||||||||
| International | 75,461 | 74,569 | (13) | 74,556 | 1.2 | ||||||||||||||||||
| Total Volume (lbs.) | 1,013,764 | 1,055,308 | (1,503) | 1,053,805 | (3.8) | ||||||||||||||||||
| Net Sales | |||||||||||||||||||||||
| Retail | $ | 1,847,806 | $ | 1,890,133 | $ | (7,921) | $ | 1,882,212 | (1.8) | ||||||||||||||
| Foodservice | 998,227 | 930,185 | (506) | 929,679 | 7.4 | ||||||||||||||||||
| International | 181,284 | 168,495 | (109) | 168,386 | 7.7 | ||||||||||||||||||
| Total Net Sales | $ | 3,027,317 | $ | 2,988,813 | $ | (8,536) | $ | 2,980,277 | 1.6 | ||||||||||||||
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LIQUIDITY AND CAPITAL RESOURCES
When assessing its liquidity and capital resources, the Company evaluates cash and cash equivalents, short-term and long-term investments, income from operations, and borrowing capacity.
Cash Flow Highlights
| Quarter Ended | |||||||||||
In thousands | January 25, 2026 | January 26, 2025 | |||||||||
Cash and Cash Equivalents at End of Period | $ | 867,906 | $ | 840,398 | |||||||
| Cash Provided by (Used in) Operating Activities | 349,214 | 309,206 | |||||||||
| Cash Provided by (Used in) Investing Activities | 7,948 | (60,333) | |||||||||
| Cash Provided by (Used in) Financing Activities | (162,433) | (143,063) | |||||||||
| Increase (Decrease) in Cash and Cash Equivalents | 197,228 | 98,516 | |||||||||
Cash and cash equivalents increased $197 million and $99 million during the first three months of fiscal 2026 and fiscal 2025, respectively. Cash provided by operating activities was sufficient to cover dividend payments and capital expenditures in both years. Additional details related to significant drivers of cash flows are provided below.
Cash Provided by (Used in) Operating Activities
•Cash flows from operating activities were impacted by changes in operating assets and liabilities.
–Inventory decreased $91 million during the first three months of fiscal 2026 compared to a decrease of $56 million in the comparable period of the prior year. The decrease in inventory during fiscal 2026 was driven by holiday sales and lower raw material markets compared to the end of fiscal 2025. The decrease in inventory during fiscal 2025 was primarily driven by holiday sales and constrained turkey inventories.
–Accounts receivable decreased $91 million and $57 million during the first three months of fiscal 2026 and fiscal 2025, respectively, primarily due to lower sales compared to the fourth quarter of each respective prior year.
–Net income taxes payable benefited from the receipt of a $38 million federal income tax refund in fiscal 2026.
–Accounts payable and accrued expenses decreased $97 million and $56 million during the first three months of fiscal 2026 and fiscal 2025, respectively. These decreases were driven by annual incentive payments and livestock and feed deferral payments, which were partially offset by higher marketing accruals. The decrease in fiscal 2026 was also due to the general timing of invoice payments.
Cash Provided by (Used in) Investing Activities
•Capital expenditures were $69 million and $72 million during the first three months of fiscal 2026 and fiscal 2025, respectively. The largest projects during fiscal 2026 were related to capacity expansion at the ambient meat snack facility in Jiaxing, China, and investments in data and technology. Significant projects during fiscal 2025 included the transition from harvest to value-added capacity for Hormel® Fire Braised® products and Applegate® products at the Company's facility in Barron, Wisconsin, and equipment upgrades for chili production in Beloit, Wisconsin.
•Proceeds from the sale of business were $79 million during the first three months of fiscal 2026, from the sale of the Company’s controlling equity interest in Justin's, LLC, and were $14 million in the first three months of fiscal 2025, primarily from the sale of the Company's equity interest in Mountain Prairie, LLC.
Cash Provided by (Used in) Financing Activities
•Cash dividends paid to the Company’s shareholders totaled $160 million during the first three months of fiscal 2026, compared to $155 million in the comparable period of fiscal 2025.
Sources and Uses of Cash
The Company believes its business model, with diversification across raw material inputs, channels, and categories, provides stability in ever-changing economic environments. The Company maintains a disciplined capital allocation strategy and uses a waterfall approach, which focuses first on core uses of cash, such as capital expenditures to maintain facilities, dividend returns to investors, mandatory debt repayments, and fulfillment of pension obligations. Next, the Company looks to strategic items in support of growth initiatives, such as other capital projects, acquisitions, additional dividend increases, and working capital investments. Finally, the Company evaluates opportunistic uses, including incremental debt repayment and share repurchases.
The Company believes its anticipated income from operations, cash on hand, borrowing capacity under the current unsecured revolving credit facility, and access to capital markets will be adequate to meet all short-term and long-term commitments. The Company expects to continue optimizing its portfolio through acquisitions and divestitures that align with its strategic priorities. The Company maintains multiple liquidity sources, including its ability to issue debt, which supports strategic investments and acquisitions.
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Dividend Payments
The Company remains committed to providing returns to investors through cash dividends on its common stock. The Company has paid 390 consecutive quarterly dividends since becoming a public company in 1928. On November 24, 2025, the Board of Directors authorized a quarterly dividend for the first quarter of fiscal 2026, of $0.2925 per share, a 1% increase from the prior year.
Capital Expenditures
Capital expenditures are allocated to required maintenance and growth opportunities based on the needs of the business. Capital expenditures supporting growth opportunities in fiscal 2026 are expected to focus on projects related to infrastructure, new data and technology, and equipment upgrades. Capital expenditures for fiscal 2026 are estimated to be $260 million to $290 million.
Debt
As of January 25, 2026, the Company’s outstanding debt included an aggregate of $2.9 billion of fixed rate unsecured senior notes due in fiscal 2027, 2028, 2030, and 2051 with interest payable semi-annually. During the first three months of fiscal 2026, the Company made $25 million of interest payments and the Company expects to make an additional $49 million of interest payments in fiscal 2026 on these notes. See Note L - Long-term Debt and Other Borrowing Arrangements of the Notes to the Consolidated Financial Statements for additional information.
Borrowing Capacity
As a source of short-term financing, the Company maintains a $750 million unsecured revolving credit facility. The maximum commitment under this credit facility may be further increased by $375 million upon the satisfaction of certain conditions. Extensions of credit under the facility may be applied by the Company to refinance existing indebtedness and for working capital and other general corporate purposes, including acquisition funding, and may be made in the form of revolving loans, swing line loans, and letters of credit. The lending commitments under the facility are scheduled to expire on March 25, 2030, at which time the Company will be required to pay in full all obligations then outstanding. As of January 25, 2026, the Company had no outstanding borrowings under this facility.
Debt Covenants
The Company’s debt agreements contain customary terms and conditions including representations, warranties, and covenants. These debt covenants limit the ability of the Company to, among other things, incur debt for borrowed money secured by certain liens, or engage in certain sale and leaseback transactions, and the covenants require the Company to maintain certain consolidated financial ratios. As of January 25, 2026, the Company was in compliance with all covenants in its debt agreements and expects to maintain compliance in the future.
Cash Held by International Subsidiaries
As of January 25, 2026, the Company’s international subsidiaries held $214 million of cash and cash equivalents. During the first quarter of fiscal 2026, the Company repatriated $21 million in cash from international subsidiaries with a one-time distribution. The Company maintains all undistributed earnings as permanently reinvested. The Company evaluates the balance and uses of cash held internationally based on the needs of the business.
Share Repurchases
The Company is authorized to repurchase 3,677,494 shares of common stock as part of an existing plan approved by the Company’s Board of Directors. Under the share repurchase authorization, the Company may repurchase shares periodically, depending on market conditions and other factors, and may do so in open market purchases or privately negotiated transactions. The share repurchase authorization has no expiration date. The Company did not repurchase any shares of stock during the first three months of fiscal 2026. The Company continues to evaluate share repurchases as part of its capital allocation strategy.
Commitments
There have been no material changes to the information regarding the Company’s future contractual financial obligations previously disclosed in the Company’s Annual Report on Form 10-K for the fiscal year ended October 26, 2025.
TRADEMARKS
References to the Company’s brands or products in italics within this report represent valuable trademarks owned or licensed by Hormel Foods, LLC or other subsidiaries of Hormel Foods Corporation.
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CRITICAL ACCOUNTING ESTIMATES
Management’s discussion and analysis of financial condition and results of operations is based upon the Company’s consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these financial statements requires the Company to make estimates, judgments, and assumptions that can have a meaningful effect on the reporting of consolidated financial statements. The significant accounting policies used in preparing these consolidated financial statements are consistent with those described in Note A - Summary of Significant Accounting Policies of the Notes to the Consolidated Financial Statements in the Form 10-K.
Critical accounting estimates are defined as those reflective of significant judgments, estimates, and uncertainties, which may result in materially different results under different assumptions and conditions. There have been no material changes in the Company’s Critical Accounting Estimates as disclosed in its Annual Report on Form 10-K for the fiscal year ended October 26, 2025.
FORWARD-LOOKING STATEMENTS
This report contains forward-looking statements, which are based on the Company's current assumptions and expectations. These statements are typically accompanied by the words "aim," "anticipate," "believe," "could," “estimate,” "expect," “intend,” "may," "might," “plan,” “project,” "seek," “target,” "will," "would," or similar words or expressions. The principal forward-looking statements in this report include statements regarding the Company's: future financial and operational performance, fiscal 2026 outlook, expectations regarding commodity markets and raw material costs, intentions regarding future dividends, expectations regarding the Company's strategic initiatives, including the Transform and Modernize initiative and the Company's recent corporate restructuring plan, expectations for the adequacy of and costs associated with the Company's sources of liquidity, expected compliance with debt covenants, expectations regarding its contractual obligations and liabilities, expectations regarding the impact of new accounting pronouncements, expected contributions and payments related to its pension plan, expectations regarding the return on plan assets, expectations regarding the timing and recognition of compensation expenses, and expectations regarding the outcome of, and adequacy of its reserves for, claims, litigation, and the resolution of tax matters.
All such forward-looking statements are intended to enjoy the protection of the safe harbor for forward-looking statements contained in the Private Securities Litigation Reform Act of 1995, as amended. Although the Company believes there is a reasonable basis for the forward-looking statements, its actual results could be materially different. The most important factors that could cause the Company's actual results to differ from its forward-looking statements include, but are not limited to, risks related to the deterioration of economic conditions; risks related to acquisitions, joint ventures, equity investments, and divestitures; risks and uncertainties associated with intangible assets, including any future goodwill or intangible assets impairment charges; the risk of disruption of operations; the risk that the Company may fail to realize anticipated cost savings or operating profit improvements associated with strategic initiatives, including the Transform and Modernize initiative and the Company's recent corporate restructuring plan; risk of unfavorable changes in the Company's relationships with third parties; risk of the Company's inability to protect information technology (IT) systems against, or effectively respond to, cyberattacks, security breaches or other IT interruptions; labor relations and labor availability risks; food safety risks; fluctuations in commodity prices and availability of raw materials and other inputs; fluctuations in market demand for the Company's products; risks related to the Company's ability to respond to changing consumer preferences; damage to the Company's reputation or brand image; risks of litigation; risks associated with government regulation; risks related to trade policies, export and import controls, and tariffs; and the other risks and uncertainties described in Item 1A – Risk Factors of the Company’s Annual Report on Form 10-K for the fiscal year ended October 26, 2025. Though the Company has attempted to list comprehensively these important cautionary risk factors, the Company cautions that other factors may in the future prove to be important in affecting the Company’s business or results of operations. Forward-looking statements speak only as of the date they are made, and the Company does not undertake any obligation to update any forward-looking statement except as otherwise required by law.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company is exposed to various forms of market risk as a part of its ongoing business practices including commodity price risk, interest rate risk, foreign currency exchange rate risk, investment risk, and concentration of credit risk, among others. The Company may use derivative financial and commodity instruments to manage these risks and does not enter into these instruments for trading or speculative purposes. There have been no material changes in the Company's market risk as disclosed in its Annual Report on Form 10-K for the fiscal year ended October 26, 2025 except as noted below.
Commodity Price Risk: The Company is subject to commodity price risk through grain, lean hog, natural gas, and diesel fuel markets. To reduce these exposures and offset the fluctuations caused by changes in market conditions, the Company employs hedging programs. These hedging programs utilize futures, swaps, and options contracts and are accounted for as cash flow hedges. The fair value of the Company’s cash flow commodity contracts as of January 25, 2026, was $14.9 million. The
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Company measures its market risk exposure on its cash flow commodity contracts using a sensitivity analysis, which considers a hypothetical 10 percent change in the market prices. A 10 percent decrease in the market price would have negatively impacted the fair value of the Company’s cash flow commodity contracts as of January 25, 2026, by $32.4 million, which in turn would have lowered the Company’s future cost on purchased commodities by a similar amount.
Interest Rate Risk: The Company is subject to interest rate risk primarily from changes in fair value of long-term fixed rate debt. The Company’s long-term debt had a fair value of $2.5 billion as of January 25, 2026. The Company measures its market risk exposure of long-term fixed rate debt using a sensitivity analysis, which considers a hypothetical 10 percent change in interest rates. As of January 25, 2026, a 10 percent decrease in interest rates would have positively impacted the fair value of the Company’s long-term debt by $60.9 million. A 10 percent increase would have negatively impacted the long-term debt by $56.5 million.
Foreign Currency Exchange Rate Risk: The fair values of certain Company assets and liabilities are subject to fluctuations in foreign currency exchange rates. The Company’s net asset position in foreign currencies was $0.8 billion as of January 25, 2026, with most of the exposure existing in Chinese yuan, Indonesian rupiah, and Philippine peso. The Company does not use market risk sensitive instruments to manage this risk.
Investment Risk: The Company has corporate-owned life insurance policies classified as trading securities as part of a rabbi trust to fund certain supplemental executive retirement plans and deferred income plans. The rabbi trust is invested primarily in fixed income funds. The Company is subject to market risk due to fluctuations in the value of the remaining investments. As of January 25, 2026, the balance of these securities totaled $222.4 million. A hypothetical 10 percent decline in the value of the investments not held in fixed income funds would have negatively impacted the Company’s pre-tax earnings by approximately $10.8 million, while a 10 percent increase in value would have a positive impact of the same amount.
Concentration of Credit Risk: The Company is exposed to credit risk from its customers. The Company regularly assesses the credit worthiness of its customers. As of January 25, 2026, one customer accounted for more than 10 percent of net accounts receivable.
Item 4. CONTROLS AND PROCEDURES
(a) Disclosure Controls and Procedures.
As of the end of the period covered by this report (the Evaluation Date), the Company carried out an evaluation, under the supervision and with the participation of management, including the Interim Chief Executive Officer and the Interim Chief Financial Officer and Controller, of the effectiveness of the design and operation of its disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934, as amended (the Exchange Act)). In designing and evaluating the disclosure controls and procedures, management recognized any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. Based on that evaluation, the Company’s Interim Chief Executive Officer and Interim Chief Financial Officer and Controller concluded, as of the Evaluation Date, the Company’s disclosure controls and procedures were effective to provide reasonable assurance the information the Company is required to disclose in reports it files or submits under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the Securities and Exchange Commission rules and forms, and such information is accumulated and communicated to the Company’s management, including its Interim Chief Executive Officer and Interim Chief Financial Officer and Controller, as appropriate, to allow timely decisions regarding required disclosure.
(b) Internal Control over Financial Reporting.
The Company is in the midst of a multi-year transformation project to achieve better analytics, customer service, and process efficiencies through the use of Oracle Cloud Solutions. During fiscal 2024, the Company began implementing the order-to-cash phase at certain business locations. Implementation is expected to be completed in fiscal 2026. Emphasis has been on the maintenance of effective internal controls and assessment of the design and operating effectiveness of key control activities throughout each development and deployment phase.
With the exception of the order-to-cash implementation described above, there were no changes in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) during the first quarter of fiscal 2026 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II - OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
Information regarding legal proceedings is available in Note K - Commitments and Contingencies of the Notes to the Consolidated Financial Statements.
Item 1A. RISK FACTORS
The Company’s business, operations, and financial condition are subject to various risks and uncertainties. There have been no material changes to the risk factors previously disclosed in Part I, Item 1A. Risk Factors in the Company’s Annual Report on Form 10-K for the fiscal year ended October 26, 2025.
Item 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
There were no issuer purchases of equity securities in the quarter ended January 25, 2026. On January 29, 2013, the Company’s Board of Directors authorized the repurchase of 10,000,000 shares of its common stock with no expiration date. On January 26, 2016, the Board of Directors approved a two-for-one split of the Company’s common stock to be effective January 27, 2016. As part of the stock split resolution, the number of shares remaining to be repurchased was adjusted proportionately. As of January 25, 2026, the maximum number of shares that may yet be purchased under the repurchase plans or programs is 3,677,494.
Item 3. DEFAULTS UPON SENIOR SECURITIES
None.
Item 4. MINE SAFETY DISCLOSURES
None.
Item 5. OTHER INFORMATION
During the fiscal quarter ended January 25, 2026, no director or officer of the Company adopted, modified, or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as the terms are defined in Item 408(a) of Regulation S-K.
Item 6. EXHIBITS
| 101 | The following financial statements from the Company’s Quarterly Report on Form 10-Q for the quarter ended January 25, 2026, formatted in Inline XBRL: (i) Consolidated Statements of Operations, (ii) Consolidated Statements of Comprehensive Income, (iii) Consolidated Statements of Financial Position, (iv) Consolidated Statements of Changes in Shareholders’ Investment, (v) Consolidated Condensed Statements of Cash Flows, and (vi) Notes to the Consolidated Financial Statements. | ||||
| 104 | The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended January 25, 2026, formatted in Inline XBRL (included as Exhibit 101). | ||||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| HORMEL FOODS CORPORATION | ||||||||
| (Registrant) | ||||||||
| Date: February 26, 2026 | By: | /s/ PAUL R. KUEHNEMAN | ||||||
| PAUL R. KUEHNEMAN | ||||||||
Interim Chief Financial Officer and Controller | ||||||||
(Duly Authorized Officer and Principal Financial and Accounting Officer) | ||||||||
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