Sanderson Farms has seen its losses widen in the first quarter, as its sales to the food sector dropped with consumers increasingly eating at home.
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The US chicken producer posted losses of US$6.7m for the quarter ended 31 January. In the first quarter of last year Sanderson posted earnings of $6.2m.
“Demand for chicken products held steady in the retail grocery market, but the slowdown in restaurant traffic continues to adversely affect sales to our food service customers,” CEO Joe Sanderson said in a statement released today (26 February).
First quarter revenue increased by 7% to $388.9m from $362.6m.
Chicken prices were mixed during the quarter: the price of whole chickens – which are primarily sold into the retail sector – increased 13%, while boneless breasts – which are mostly sold to restaurants – dropped 9%, the company said.
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By GlobalDataCommenting on the outlook for its food service business, Sanderson said: “We do not expect demand to improve until the economy gains some traction and consumers resume spending and dining out again.”
In the fiscal ended 31 October the company booked an annual net loss of $43.1m.
