As Hormel Foods leans into the protein trend to support revenues and profits, the US retail and foodservice business has hinted at further portfolio pruning.

The Justin’s brand of nut butters and chocolate snacks has already been spun-off into a venture with private-equity firm Forward Consumer Partners and Hormel Foods’ president John Ghingo suggested more are to follow.

Discussing the fiscal 2025 results with analysts yesterday (4 December), Ghingo did not provide specific examples but said efforts would be made to “simplify” the portfolio.

“Portfolio reshaping certainly is an ongoing effort for us and it's a strategic one,” he said.

“We continue to look at strategic categories and brands and making sure we're building our portfolio around our growth ambitions. And also importantly, looking at how do we simplify our operations.”

Confectionery, as per the Justin’s brand, was considered as a “non-strategic category”, he explained, adding: “If you think about simplifying operations, that includes exiting non-strategic businesses and ensuring we have the best owner for our brands and product lines.”

Protein will be the focus for Hormel Foods, which has a stable of related brands such as Jennie-O in turkey, Black Label bacon and Austin Blues smoked meats.

However, the company is facing headwinds in the new financial year from elevated beef and pork prices, along with uncertainties around the supply of turkey, which was hit in 2025 from waves of bird flu, or highly pathogenic avian influenza (HPAI).

Those headwinds could lead to higher prices in an environment where Ghingo said the “strained” consumer is still feeling the effects of inflation and uncertainty in the macro-economic picture.

“Protein demand isn't a passing trend. It's a sustained, growing priority for so many different consumer groups,” Ghingo said, although he made no mention of the growing use of the GLP-1 weight-loss drugs that are widely expected to drive increased demand.

Looking ahead to 2026, he added: “We have a balanced, protein-centric portfolio with broad capabilities to create value and win with proteins. We deliver winning protein solutions for breakfast, lunch, dinner, and every snack in between, at home or away-from-home, animal-based or plant-based.”

Jeffrey Ettinger, still acting in the interim CEO capacity since the departure of Jim Snee, said the revenue and profit guidance for the new year takes into account the commodity pressures.

“We expect pork input costs to decline compared to fiscal 2025 but still remain above the five-year average,” Ettinger explained. “Beef costs remain high and are expected to be a headwind throughout fiscal 2026 and net costs are anticipated to be elevated from the prior year as well.”

Organic growth for the new year was guided to a range of 1-4%, wider than the longer-term ambition of 2-3% and the 2024 print of 2%. Adjusted operating income is expected to grow 4-10% versus a just reported decline of 11% and the longer-term range of 5-7%.

Adjusted diluted EPS is seen increasing 4-10%, compared to a 13% decrease in fiscal 2025.

“Profit was challenged this year and value-added growth was more than offset by year-over-year margin pressures related to higher commodity input costs, supply chain impacts of avian illnesses and some discrete items,” interim CFO Paul Kuehneman said.

Kuehneman also provided an outlook for the impact of tariffs, mostly from steel and aluminium, of $25-35m.

“We are providing fiscal 2026 guidance with a slightly wider range than our growth algorithm,” Ettinger said. “This approach accounts for the dynamic current environment and supports our flexibility to navigate near-term volatility.

“We think our protein-centric portfolio, coupled with our demonstrated strength and presence in both retail and foodservice, puts us in an advantaged strategic position going forward.”