Key facts
- Hormel Foods lowered its annual sales forecast due to weak consumer demand and a pressured economic environment.
- The company's retail segment, its largest revenue generator, saw sales decline 4% and volumes fall 9%.
- Third-quarter revenue decreased by 2.4% to $2.96 billion, falling short of analyst expectations.
- Hormel raised its full-year adjusted earnings per share forecast to between $1.45 and $1.51.
- The company completed the divestiture of its Brazilian business as part of a portfolio streamlining effort.
Hormel Foods announced a reduction in its annual sales forecast, citing a challenging consumer environment characterized by inflationary pressures and reduced spending power. The company's retail segment, a significant revenue driver, experienced a 4% drop in sales and a 9% decrease in volumes. Overall third-quarter revenue declined by 2.4% to $2.96 billion, falling short of the $3.04 billion expected by analysts. This downturn was attributed to weaker demand in both its retail and international businesses.
Despite the lowered sales outlook, Hormel Foods raised its full-year adjusted earnings per share forecast to a range of $1.45 to $1.51, up from the previous projection of $1.43 to $1.51. The company's quarterly adjusted net income per share came in at 37 cents, exceeding the 35 cents anticipated by analysts. As part of its strategy to streamline its portfolio and concentrate on higher-growth markets, Hormel completed the divestiture of its Brazilian business under the CERATTI brand during the quarter.
Earlier in the week, Hormel appointed Ash Bhumbla, formerly of Tyson Foods, as its new Chief Financial Officer, effective in September. This follows the recent appointment of company veteran John Ghingo as chief executive officer last month. Shares of the Minnesota-based company saw a slight decline of 1% in premarket trading following the announcement.