Hormel Foods projects lower-than-expected annual sales, profits
USA – Hormel Foods, an American multinational food processing company, has forecast annual sales and profits below analysts’ estimates, citing reduced demand for snacking and meat products, including its Jennie-O Turkey brand.
This announcement led to a nearly 4% drop in Hormel’s stock during premarket trading.
In its latest earnings report, Hormel met Wall Street expectations for the fourth quarter.
However, sales for the period fell 2% to US$3.14 billion, with adjusted earnings per share (EPS) at US$0.42.
Jennie-O Turkey, which accounted for approximately 12% of Hormel’s sales in 2022, experienced declining demand.
The company noted that turkey’s higher price compared to chicken and pork has caused budget-conscious consumers to seek cheaper alternatives.
Hormel also attributed a decrease in turkey export volumes to challenges in international markets, leading to further setbacks.
Price increases on salty snacks across the United States have also affected sales volume, impacting not just Hormel but competitors like Campbell’s and PepsiCo.
In addition, production issues at Hormel’s Suffolk, Virginia, facility have hampered output of its Planters snack nuts.
The disruptions, linked to a food safety problem, began in the prior quarter and remain unresolved.
For fiscal year 2025, Hormel projects revenue between US$11.9 billion and US$12.2 billion, slightly below analysts’ expectations of US$12.23 billion.
Adjusted EPS is anticipated to range from US$1.58 to US$1.72, with the midpoint falling short of estimates at US$1.68.
Despite setbacks, Hormel’s international segment grew by 1%, benefiting from stronger demand in China after a prolonged period of weaker performance.
In September, Hormel disclosed third-quarter results that fell short of projections.
The company reported US$0.40 EPS and revenue of US$2.96 billion, a 2.3% drop from the prior year.
Following the news, its stock fell by over 7%, leaving it in negative territory for the year.
Meanwhile, Hormel introduced a new Black Label bacon product this year.
The Oven Ready Thick Cut Bacon, launched in a disposable oven-safe tray, requires minimal cleanup and is currently available in select stores.
Plans are in place for broader availability in 2025.
Additionally, Hormel debuted a bacon product flavored with Cinnamon Toast Crunch’s signature seasoning, expanding its offerings in the sweet-and-savory snack category.
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