Hormel Foods and its unionized workers agreed to a historic new contract Thursday, and the food processor issued financial targets during its investor day. Hormel stock plunged to a five-year-plus low.
Peer Lamb Weston sank in sympathy and a day after its own investor event.
The United Food and Commercial Workers International Union said workers for Hormel in Minnesota, Georgia, Wisconsin and Iowa voted to ratify a new labor contract that includes "the largest wage increases in the company's history."
On top of pay hikes of $3-$6 an hour, workers achieved concessions in areas such as benefits, the 1.3-million-strong union said. The new contract nearly doubles bereavement leave, protects health care coverage, and increases both pension and 401(k) benefits.
At an investor event Thursday, Hormel also presented three-year financial targets. It projected more than $250 million in operating income growth, or 5%-7%, by fiscal 2026.
On Wednesday, potato processor Lamb Weston reaffirmed 2024 financial targets during an investor day. It also updated its long-term forecast, now projecting sales growth in the low-to-mid single digits, and long-term earnings per share growth in the high single digits.
Hormel Stock, Lamb Weston Stock
Shares dived 9.8% to 32.67 in huge volume on the stock market today. Hormel stock hit its lowest level since early 2018, the MarketSmith chart shows.
Lamb Weston stock tanked 8.4% to 84.09 Thursday, extending Wednesday's slide and hitting a 2023 low.
About a month ago, the union rejected Hormel's contract offer as not good enough. The parties went on to reach a tentative agreement a week ago.
Notably, a 1985-86 strike at Hormel is seen as one of the longest strikes in Minnesota history. It ended in failure for the striking meatpackers and became the subject of many books.
Workers in industries from automaking to health care are engaged in contract negotiations. Workers took their ongoing strike to Ford's biggest plant in Kentucky late Wednesday.
Last month, Hormel posted its fourth straight sales decline. After a short rally, HRL stock then met resistance at the 50-day moving average.
Minnesota-based Hormel Foods makes and sells more than 40 branded food products, including Applegate, Planters and Skippy.
