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.