US: Hormel posts drop in Q1 profit
US food group Hormel Foods today (19 February) posted a drop in first-quarter profit, hurt by pressure from higher feed and fuel costs and falling volumes.
For the quarter ended 25 January, the maker of Spam and Dinty Moore stews posted a net income of US$81.4m, a drop of 8% from the comparable period last year.
Revenue climbed 4% to $1.69bn as the recession had a "mixed effect" on sales, while volume dropped 1%. Segment operating profit was down 14% from last year.
Net sales for the group's grocery products division increased 6.4% from last year to reach $241.9m, as strong sales of canned meat items such as Spam, Dinty Moore stews and Hormel chili offset softer sales of Compleats microwaveable meals.
"We have seen an upswing in sales of many of our retail products, particularly some of our traditional franchises across our different business segments, and a softening of demand for some of our newer convenience items. On balance, our overall retail sales have been relatively strong, while foodservice sales show softness", said Jeffrey Ettinger, chairman of the board, president and CEO.
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