Hormel Foods stock climbed Thursday after the packaged food maker reported stronger-than-expected second-quarter results, helped by resilient demand for protein-focused products and improving margins.

Quarterly Results Beat Estimates

Hormel Foods reported second-quarter adjusted earnings of 40 cents per share, topping analyst estimates of 36 cents per share.

Quarterly sales rose to $2.973 billion, ahead of Wall Street expectations of $2.954 billion. Organic net sales increased 3% during the quarter.

"We achieved our sixth consecutive quarter of organic top-line growth, expanded gross margins, and attained double-digit growth in adjusted earnings," Jeff Ettinger, interim CEO, said.

President John Ghingo said the company's teams are performing strongly across the organization, helping deliver solid results from its protein-focused product lineup.

The retail segment posted flat net sales, while organic net sales increased 1% despite a 2% decline in organic volume.

Foodservice organic volume rose 1% as net sales increased 6%. The international segment reported 1% organic volume growth and a 4% increase in net sales.

During the second quarter of fiscal 2026, Hormel Foods completed the previously announced sale of its whole-bird turkey business.

The company said the transaction is still expected to reduce fiscal 2026 reported net sales by about $50 million, with minimal impact on adjusted diluted earnings per share.

Operating margin declined to 7.3% from 8.6% a year earlier. However, adjusted operating margin expanded to 9.9% from 9.1% in the prior-year quarter.

Cash on hand totaled $827 million at the end of the quarter, up $156 million from the end of fiscal 2025.

Consumer Demand Holds Up Despite Cost Pressures

During the company's quarterly conference call, Hormel Foods said consumer demand for protein-focused products remained resilient despite weak consumer sentiment and broader macroeconomic pressure.

Management said consumers and foodservice operators are increasingly favoring products that offer strong value, including convenient meal-prep solutions, filling snack options and affordable protein-focused offerings.

Management also warned that elevated fuel prices, logistics costs and commodity inflation remain key headwinds heading into the second half of the year.

Outlook

Hormel Foods affirmed fiscal 2026 adjusted earnings guidance of $1.43 to $1.51 per share, compared with analyst estimates of $1.47 per share.

The company also affirmed fiscal 2026 sales guidance of $12.2 billion to $12.5 billion, versus Street estimates of $12.303 billion.

However, Hormel Foods lowered its fiscal 2026 GAAP earnings guidance to a range of $1.28 to $1.37 per share from the prior range of $1.37 to $1.46 per share.

HRL Price Action: Hormel Foods shares were up 13.41% at $23.77 at the time of publication on Thursday, according to market data.