Hormel Foods Corp., whose Wholly Guacamole products and Hormel Gathering party trays are sold in grocery store deli departments, has lowered its full-year guidance following a disappointing earnings report.
The company was pleased, however, with the performance of the two deli products.
Austin, Minn.-based Hormel reported diluted earnings per share of 34 cents, 6% lower than in the same quarter last year. As a result, the company announced it was lowering its full year guidance from $1.65-1.71 to $1.54-1.58 per share.
Despite generating record pre-tax earnings of $278 million in the second quarter, Hormel’s performance did not meet expectations, Jim Snee, the company’s president and CEO, said in a news release. Higher input costs for pork bellies, pork trim and beef trim were cited as reasons for the lackluster performance.
“In the face of a challenging year, we are focused on our strategic initiatives and are committed to maintaining a long-term perspective on our decisions,” Snee said.
Two bright spots for the company in the second quarter were its Wholly Guacamole and party tray products, both of which are marketed in supermarket delis. Sales of Wholly Guacamole dips helped drive 6% sales growth in Hormel’s Grocery Products division, and Hormel Gatherings party trays enjoyed “strong sales growth” in the quarter, according to the company.