Skippy peanut butter maker Hormel Foods missed first-quarter profit estimates, hurt by higher input costs and the persistent effects of a supply issue at its Planters brand's distribution facility from last year.
Hormel Foods, which sells snacking and packaged meat products, has also taken a hit due to lower whole turkey prices and increased advertising expenses.
The company has been struggling to boost demand for its turkey products as consumers preferred affordable meat alternatives such as beef and chicken amid high inflation.
Meanwhile, demand for certain packaged products suffered as the company kept the prices elevated to protect its margins from inflated input costs.
Hormel's Planters nut brand faced a supply disruption at its Suffolk, Virginia-based distribution facility last April, which continued to impact the company's margins in the first quarter.
"As anticipated, the first quarter was pressured as we continued to recover from the snack nuts supply disruption and lapped a full year of whole bird turkey market compression," CEO Jim Snee said.
Quarterly Highlights
The company's selling, general and administrative costs rose about 7% to $475.232 million (€456.22 million) in the quarter ended 26 January from a year ago.
Hormel earned 35 cents (€0.34) per share on an adjusted basis in the first quarter, missing analysts' average estimate of 38 cents (€0.36), according to data compiled by LSEG.
Its first-quarter sales came in at $2.99 billion (€2.87 billion), compared with estimates of $2.94 billion (€2.82 billion).
The company reaffirmed its full-year adjusted earnings forecast of $1.58 to $1.72 (€1.52 to €1.65) per share.
It expects its annual net sales to be between $11.9 billion and $12.2 billion (€11.42 billion and €11.71 billion), as previously projected.
In contrast, larger peer Tyson Foods earlier this month raised its annual sales forecast on the back of strong demand for its beef and chicken products.
