REUTERS — Hormel Foods has cut its annual sales forecast, hurt by lower commodity prices and a production disruption at its Planters brand manufacturing facility in Virginia.
The company also missed market expectations for third-quarter sales and narrowed its annual adjusted profit target.
Lower commodity prices for high-volume export products such as turkey and fresh pork have weighed significantly on Hormel’s business.
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A food safety issue at its facility in Suffolk, Virginia, which makes the Planters brand of snacks, also took a toll on U.S. retail volumes in the quarter ended July 28, which fell nine percent.
Hormel said it now expects an impact of six cents per share related to the disruption for the fiscal year ending October 2024. It is also assessing the financial impact of storm damage at its facility in Papillion, Nebraska.
The Austin, Minnesota-based company expects net sales of US$11.8 to $12.1 billion for fiscal 2024, down from its prior forecast of $12.2 to $12.5 billion.
Its quarterly net sales fell 2.2 per cent to $2.9 billion, missing analysts’ average estimate of $2.95 billion.
Still, budget-conscious consumers making more meals at home helped drive demand for several key Hormel brands, as well as sauces and snacks, partially offsetting overall declines.
Tyson Foods topped market expectations for revenue and profit in August as demand recovered for its packaged meats and cold cuts and on leaner inventory, such as in its chicken supplies.
Excluding items, Hormel Foods earned 37 cents per share for the third quarter. Analysts had expected 36 cents per share.
The company expects annual adjusted earnings per share between $1.57 and $1.63, compared with the $1.55 to $1.65 per share forecast earlier.
