Hormel officials this week reduced the company's outlook for the current fiscal year due to low turkey prices affecting its Jennie-O brand.
The Minnesota food company on Tuesday reported results for the first quarter of its 2017 fiscal year. Officials touted increases in adjusted sales and volumes, but net earnings were flat and sales were down slightly compared to the same quarter in the previous fiscal year.
The company said that Jennie-O Turkey Store sales increased 13 percent but that lower-than-expected prices led to a 25 percent decline in profits from that brand.
Officials said that competition in the food service, deli and retail segments put increased pressure on prices, along with increasing operating expenses.
"We are tempering our full year outlook for the Jennie-O Turkey Store segment given the shortfalls in the first quarter and the expected continuation of pricing pressure due to low commodity turkey prices," said president and CEO Jim Snee. "Improvements in our other segments are expected to offset some of the earnings headwinds from Jennie-O Turkey Store."
The first quarter results also reflected Hormel's acquisition of nut butter company Justin's as well as its divestitures of the Diamond Crystal Brands and Farmer John businesses.