Why Hormel Foods (HRL) Is Down 11.5% After Cutting Earnings Outlook Amid Inflation Pressures

• In August 2025, Hormel Foods Corporation issued revised earnings guidance for the fiscal year, lowering its expected diluted earnings per share and operating income amid ongoing commodity inflation and supply chain challenges, while reporting higher third-quarter sales but pressured profit margins.
• Although revenue trends remain positive, Hormel's management highlighted that continued profit headwinds from commodity costs are expected to persist into next year despite targeted pricing actions.
• We'll review how the lowered full-year earnings guidance amid inflationary pressures may influence Hormel Foods' previously optimistic investment narrative.

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Hormel Foods Investment Narrative Recap

Being a shareholder in Hormel Foods requires confidence in the company’s ability to grow its value-added branded portfolio while navigating periods of margin pressure. The latest reduction in annual earnings guidance, prompted by commodity inflation and ongoing supply chain hurdles, directly impacts Hormel’s most important short-term catalyst, margin recovery, while highlighting the main risk of persistently high input costs affecting profitability and possibly delaying a sustained earnings rebound.

Of the recent announcements, the downward revision of Hormel’s full-year earnings guidance stands out as particularly relevant. This announcement underscores how rising commodity costs are currently outpacing targeted pricing actions and margin improvement initiatives, bringing the principal risk, input cost volatility, into sharper focus and forcing investors to recalibrate their expectations for near-term profit recovery.

In contrast, what remains easy to miss is that Hormel’s lofty ambitions for value-added product growth could be derailed if margin pressures...

Read the full narrative on Hormel Foods (it's free!)

Hormel Foods' outlook anticipates $12.9 billion in revenue and $1.0 billion in earnings by 2028. This requires a 2.6% annual revenue growth rate and an earnings increase of approximately $252 million from current earnings of $747.5 million.

Uncover how Hormel Foods' forecasts yield a $33.00 fair value, a 30% upside to its current price.

Exploring Other Perspectives

Five private investor fair value estimates from the Simply Wall St Community range from US$24.36 to US$42.58. With margin volatility in focus, opinions on Hormel Foods' prospects span a broad spectrum, be sure to look at multiple viewpoints.

Explore 5 other fair value estimates on Hormel Foods - why the stock might be worth as much as 67% more than the current price!

Build Your Own Hormel Foods Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Hormel Foods research is our analysis highlighting 2 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Hormel Foods research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Hormel Foods' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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