Shares in Hormel Foods fell today (21 May), despite the US food group posting higher second-quarter profits, after the company said annual earnings would be at the low end of its forecast.

Jeffrey Ettinger, Hormel’s chairman, president and CEO, said the Spam maker was holding firm on its forecast for full-year earnings per share but admitted the company was feeling the pinch from costs.

“Elevated pork, beef, turkey, and avocado costs, driven by tighter raw material supplies, are presently compressing margins on many of our value-added products. We are maintaining our fiscal 2014 guidance range of $2.17 to $2.27 per share, but expect these cost pressures to push our full-year earnings toward the lower end of this range,” Ettinger said.

Hormel posted a 12% increase in net earnings of $140.1m for its second quarter, which ran until 27 April. It reported “record” diluted earnings per share of $0.52, up 13% on the year. Six analysts polled by Reuters had on average forecast earnings of $0.56 a share.

Segment operating profit increased 14.1% to $223.1m.

Sales were up 4.3% at $2.24bn, which Hormel said was another record.

Shares in Hormel were down 3.17% at $46.99 at 10:51 ET.

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