Hormel Reports Mixed Q2: Adjusted EPS Up 14%, GAAP EPS Down 12% Amid Divestiture Losses
HRL sits 21% above its 52-week low of $19.7.
Summary
Hormel Foods reported a 14.3% increase in adjusted Q2 EPS and a 2.5% rise in net sales, alongside a 44.4% jump in cash flow from operations, despite a 12.1% decline in GAAP EPS due to a divestiture loss.
Key Events · Earnings and Guidance · HRL
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Adjusted EPS Growth
Adjusted diluted EPS for Q2 fiscal 2026 increased by 14.3% to $0.40, compared to $0.35 in the prior year period.
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GAAP EPS Decline
GAAP diluted EPS for Q2 fiscal 2026 decreased by 12.1% to $0.29, down from $0.33 in the prior year, largely impacted by non-recurring items.
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Net Sales Increase
Net sales for Q2 fiscal 2026 rose by 2.5% to $2.97 billion, with organic net sales growing by 3.3%.
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Strong Cash Flow from Operations
Net cash provided by operating activities for the first six months of fiscal 2026 increased by 44.4% to $528.15 million.
Analysis · HRL · Manufacturing
Hormel Foods reported a mixed second quarter, with GAAP diluted EPS declining by 12.1% to $0.29, primarily due to a $61.0 million pre-tax loss from the sale of its whole-bird turkey business. However, adjusted diluted EPS increased by 14.3% to $0.40, surpassing analyst estimates. Net sales grew by 2.5% to $2.97 billion. The company demonstrated strong liquidity, with cash flow from operations increasing by 44.4% to $528.15 million for the first six months of fiscal 2026. A significant portion of long-term debt, $500 million, was reclassified to current maturities, but the company maintains compliance with all debt covenants and has a $750 million unsecured revolving credit facility with no outstanding borrowings.
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At the time of this filing, HRL was trading at $23.85 on NYSE in the Manufacturing sector, with a market capitalization of approximately $13.1B. The 52-week trading range was $19.70 to $31.86. This filing was assessed with positive market sentiment and an importance score of 7 out of 10.