How HRL Is Reshaping Its Portfolio to Support Long-Term Growth

Hormel Foods Corporation HRL continues to refine its business mix as part of efforts to strengthen profitability and adapt to evolving consumer demand. The company has entered into an agreement to sell its whole-bird turkey business to Life-Science Innovations. The transaction is expected to close by the end of the second quarter of fiscal 2026. 

The divestiture underscores Hormel Foods’ ongoing shift toward value-added protein offerings while reducing exposure to commodity-driven operations that can introduce earnings volatility. By exiting the whole-bird turkey segment, the company aims to sharpen its focus on branded and processed protein products.

As part of the agreement, Life-Science Innovations will acquire production assets, including a Minnesota processing facility, a feed mill, transportation equipment and related grower supply contracts dedicated to the whole-bird business. The buyer will also provide co-manufacturing services through fiscal 2026 to help ensure uninterrupted fulfillment of customer orders in the transition period. The agreement builds on a decades-long relationship tied to the Jennie-O business and brings together established grower networks and modern production capabilities to support ongoing operations. Hormel Foods will continue to own the Jennie-O brand and its portfolio of branded turkey products.

Management expects the divestiture to have only a limited impact on adjusted fiscal 2026 results, with additional details expected in the company’s upcoming earnings discussion. 

The move is part of Hormel Foods’ broader efforts to streamline its turkey operations and align resources with areas of strategic focus. The company indicated that the transition will be managed to support continuity for employees, customers, growers and suppliers. Upon completion, the transaction will narrow Hormel Foods’ exposure to the whole-bird turkey segment while enabling Life-Science Innovations to assume responsibility for those operations and maintain supply continuity in the ownership transition.

Hormel Foods’ Zacks Rank & Share Price Performance

Shares of this Zacks Rank #3 (Hold) company have gained 10.4% in the past three months compared with the broader Consumer Staples sector and the industry’s growth of 12.6% and 10.9%, respectively. HRL has outperformed the S&P 500 index’s growth of 3.2% in the same period.

HRL Stock's Past 3 Months’ Performance

Is Hormel Foods a Value Play Stock?

Hormel Foods currently trades at a forward 12-month P/E ratio of 16.4 compared with the industry average of 13.04. This valuation places the stock at a premium relative to peers, indicating broader market expectations around its business stability and ability to navigate current cost and demand dynamics.

HRL Valuation Picture

Stocks to Consider

The Hershey Company HSY engages in the manufacture and sale of confectionery products and pantry items in the United States and internationally. It sports a Zacks Rank #1 (Strong Buy) at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Hershey’s current financial-year sales and earnings indicates growth of 4.4% and 27.1%, respectively, from the prior-year reported levels. HSY delivered a trailing four-quarter earnings surprise of 17.2%, on average. 

The Simply Good Foods Company SMPL, a consumer-packaged food and beverage company, engages in the development, marketing and sale of snacks and meal replacements and other products in North America and internationally. It flaunts a Zacks Rank #1 at present. SMPL delivered a trailing four-quarter earnings surprise of 5.5%, on average. 

The Zacks Consensus Estimate for Simply Good Foods’ current fiscal-year earnings implies growth of 1.6% from the year-ago figures.

Ollie's Bargain Outlet Holdings, Inc. OLLI operates as a retailer of closeout merchandise and excess inventory in the United States. OLLI currently has a Zacks Rank #2 (Buy). Ollie's Bargain delivered a trailing four-quarter earnings surprise of 5.2%, on average.

The Zacks Consensus Estimate for Ollie's Bargain’s fiscal 2025 sales and earnings implies growth of 16.7% and 17.7%, respectively, from the previous year’s reported numbers.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research