Feb 26 (Reuters) - Skippy peanut butter maker Hormel Foods missed quarterly sales estimates on Thursday, reflecting U.S. consumers' shift towards cheaper alternatives amid economic uncertainty.
The packaged-food maker had hiked prices in fiscal 2025 to counter soaring costs of commodities such as beef and pork, which were triggered in part by tariff-related uncertainty. But this came at a time when consumers were tightening budgets amid persistent inflation and economic uncertainty.
Hormel also faces pressures in its retail segment, a major revenue contributor, from several factors, including its strategic exit from select non-core private-label snack nut items and softer demand for branded and private-label packaged deli products.
First-quarter sales volumes in its retail segment declined 6%, compared with a 4% fall a year ago.
The company also reaffirmed its annual net sales forecast in the range of $12.2 billion to $12.5 billion, in line with expectations of $12.38 billion. It continues to expect 2026 adjusted profit per share between $1.43 and $1.51, compared with estimates of $1.47.
The forecast does not include the impact of the company's sale of its struggling whole-bird turkey business to Life-Science Innovations in February, Hormel said. However, it anticipates the deal to reduce about $50 million from fiscal 2026 net sales, with a minimal impact on its adjusted earnings per share.
Earlier this month, peers General Mills cut its annual forecasts on softer demand, while meatpacker Tyson Foods posted higher-than-expected quarterly earnings as increased demand for its chicken products overshadowed hefty losses in its beef business.
Hormel, which also sells snacking and packaged meat products, posted quarterly sales of $3.03 billion, compared with analysts' estimates of $3.07 billion, as per data compiled by LSEG.
The company posted adjusted earnings of 34 cents per share, compared with expectations of 32 cents.
(Reporting by Krisha Bhatt in Bengaluru; Editing by Leroy Leo)
