- Hormel missed earnings and revenue estimates and cut its outlook on falling meat prices and a drop in sales in China.
- All of the company's segments had a decline in sales, with international revenue tumbling 6%.
- Hormel anticipates consumers and operators to remain "highly intentional" in their spending.
Falling meat prices and slowing demand in China ate into profit and sales at Hormel Foods (HRL), the maker of Spam, Skippy Peanut Butter, and other foods, which cut its full-year guidance.
Hormel posted fiscal 2023 third quarter earnings per share (EPS) of $0.40, with revenue declining 2.3% to $2.96 billion. Both missed analysts’ estimates.
Retail segment sales fell 2% and foodservice unit sales were down 3% on lower pricing for certain items, including bacon. International division sales slumped 6%, dragged down by “unfavorable pork and turkey commodity markets, continued softness in China and lower branded export demand,” the company said in a statement.
The operating environment both domestically and overseas “continues to be dynamic, and we anticipate consumers and operators to remain highly intentional in their spending,” CEO Jim Snee said in the statement.
Hormel now projects 2023 EPS in a range of $1.61 to $1.67, a drop from its previous outlook of $1.70 to $1.82. It predicts sales will be flat to down 4% after earlier anticipating a gain of 1% to 3%.
Hormel Foods shares lost ground following the news, closing 2.7% lower, and have traded in negative territory for most of 2023.