June 18 Hormel Foods Corp, which makes
Spam lunch meat, cut its full-year earnings outlook on Tuesday,
citing weakness in its pork business, softer sales of its
refrigerated foods and higher meat costs, and its shares fell
nearly 5 percent.
Hormel, which is also a turkey and pork processor, said it
expected earnings of $1.88 to $1.96 a share for the year ending
in October, down from its prior forecast of $1.93 to $2.03.
Analysts on average had forecast a profit of $1.99 a share,
according to Thomson Reuters I/B/E/S.
Hormel was squeezed by higher costs for chicken, pork and
beef, a spokesman said.
The company said it would provide more details of the
outlook at its investor day on June 26.
Earlier this year, Hormel bought Skippy peanut butter,
aiming to diversify away from its core meat businesses.
That move should mitigate some of the risks associated with
the lower-margin meat business, said Janney Capital Markets
analyst Jonathan Feeney, but he added that the stock still
warranted a discount to the broader packaged food sector.
Hormel shares were down $1.89, or 4.6 percent, at $38.76 on
the New York Stock Exchange.