Hormel Foods Corp. on May 23 lowered its outlook for fiscal 2019 despite reporting second-quarter earnings that surpassed analysts' expectations.
The meat and food products company said it now expects full-year EPS to come in at $1.71 to $1.85, versus its previous guidance of $1.77 to $1.91. It also anticipates net sales to range between $9.50 billion and $10 billion, compared to its prior outlook of $9.70 billion to $10.20 billion.
Chairman, President and CEO Jim Snee said the company experienced rapidly increasing output costs as the African swine fever in China affected global hog and pork markets in the quarter. In response, Hormel Foods has announced "pricing action" across its branded portfolio in its grocery products, refrigerated foods and international segments.
For the quarter ended April 28, Hormel Foods said adjusted diluted EPS was 46 cents, above the S&P Global Market Intelligence consensus normalized EPS estimate of 45 cents.
Net sales inched up 0.6% year over year to $2.34 billion from $2.33 billion, as growth in its grocery products, refrigerated foods and Jennie-O Turkey Store segments offset the decline in its international business unit.
Operating margin for the period was 13.3%, compared to 12.9% in the year-ago period.