Shares of Hormel Foods took a downturn following the release of its three-year plan and the announcement of a new labor agreement. The company’s stock fell by nearly 9% to $33.08 in morning trading, reaching its lowest level since March 23, 2018. Year-to-date, the stock has declined by almost 28%.
Hormel held an investor day, during which it shared a presentation outlining its long-term financial targets. The company aims to increase its operating income by more than $250 million by fiscal 2026, with a projected growth rate of 5% to 7% from its existing business.
To achieve this target, Hormel plans to implement cost-cutting initiatives and optimize its supply chain, anticipating savings of at least $200 million by 2026. Additionally, the company expects more than $25 million in additional operating income through its transformation plan for the Jennie-O Turkey Store business, as well as from mergers and acquisitions synergies.
In an unrelated development, the United Food and Commercial Workers International Union (UFCW) announced that its members working at Hormel locations in Minnesota, Georgia, Wisconsin, and Iowa have ratified a new contract. The agreement includes hourly wage increases ranging from $3 to $6 per hour, along with various other benefits for workers.
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