Hormel Foods has lowered its earnings per share guidance for the full year, warning that higher than expected fuel and feed input costs have eaten into profits in the third quarter.
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The consumer-branded meat and food group said that it anticipates EPS of between US$0.37 and $0.39 for the third quarter of its financial year. This compares to EPS of $0.41 posted in the comparable period of last year.
Hormel chairman, president and CEO Jeffrey Ettinger said that feed and fuel costs at the company’s Jennie-O Turkey Store division were the primary reason for the shortfall.
“While we have continued to implement price increases in this segment, they have not been adequate to offset the higher input costs. An oversupply of turkey breast meat also kept pricing of commodity breast meat at a low level, exacerbating the cost-price differential,” he said.
Looking to the fourth quarter, Ettinger warned that the group expects Jennie-O earnings to come under continued pressure.
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By GlobalData”We are adjusting our full-year guidance to $2.22-2.28 per share, which is above our results of $2.17 per share last year,” Ettinger added.
Previously Hormel had issued full-year EPS guidance of $2.30 – $ 2.40 per share.
