Hormel Foods has lowered its sales guidance after pressure on parts of the US group’s turkey and snacks businesses weighed on its third-quarter results.
The Jennie-O turkey and Skippy peanut butter brands owner now sees its annual net sales rising 1-2% on an organic basis, versus its earlier growth forecast of 1-4%.
It projects annual net sales in the range of $12.1-12.2bn.
Hormel said the revised outlook for its organic sales growth covers the impact of the sale of its business in Brazil and its "view on the external environment".
At the same time, the company raised its adjusted operating income outlook to between $1.08-1.12bn and lifted adjusted earnings per share (EPS) guidance to $1.45-1.51, with both measures implying growth of 6% to 10%.
However, it cut its diluted EPS guidance to a range of $1.06-1.12 from $1.28-1.37.
Starting in the fiscal fourth quarter, it will remove the divested unit in Brazil from year-over-year non-GAAP organic volume and organic net sales comparisons.
In the third quarter, net sales were $2.96bn, a decline of 2.4% from a year earlier, while organic net sales dropped 2%.
"While net sales declined, the results reflected the impacts of portfolio-shaping actions, lower commodity-based pricing in portions of the business and a consumer environment that remains under pressure,” said John Ghingo, the president and CEO-elect who is set to take reins of the New York-listed manufacturer in October.
Hormel’s retail segment posted a 4.3% decline in net sales, while profit in that business fell 3.7%.
Within retail, weakness in commodity turkey and private label snack nuts was partly balanced by gains in value-added turkey products, contract manufacturing and Planters snack nuts. The company also recorded volume growth from brands including Hormel Black Label bacon and Applegate natural and organic meats.
Foodservice was the strongest part of the business during the quarter, as net sales increased 1.6% and segment profit rose 2.7%.
International net sales fell 4.7% and the segment moved to a $29m loss. The division's profit was "significantly impacted" by a non-cash impairment charge in Indonesia.
At a group level, Hormel reported operating income of $111m, down from $239.7m a year earlier.
Adjusted operating income of $266m, versus $254.2m a year ago.
Interim CEO Jeff Ettinger added: "We delivered solid third quarter results, growing our adjusted earnings and continuing to advance our fiscal 2026 objectives. With our strong year-to-date performance and continued opportunities ahead, we are raising and narrowing our adjusted earnings outlook for fiscal 2026 and remain confident in delivering adjusted earnings growth for the year consistent with, or above, our long-term algorithm."
