By Anuja Bharat Mistry
(Reuters) -Skippy peanut butter maker Hormel Foods (NYSE:HRL) topped market expectations for first-quarter sales and profit on Thursday, helped by resilient demand for its high-priced meat products and ready-to-eat meals, sending its shares up as much as 16.8%.
The Austin, Minnesota-based company's shares were trading at $34.15 in the morning trade.
Overall volumes of Hormel Foods grew 4% in the quarter for products like Chi-Chi's salsa and Hormel Natural Choice bacon, among others, as more consumers preferred cooking meals at home.
Shares should do well since this was Hormel's biggest core profit beat since the first quarter of fiscal 2016, JP Morgan analyst Ken Goldman said in a note.
Earlier this month, larger rival Tyson Foods (NYSE:TSN) also reported a rise in quarterly sales with steady demand in its pork business.
For the first quarter, Hormel Foods posted net sales of $3 billion, compared with analysts' average estimate of $2.91 billion, according to LSEG data.
A significant price hike in previous quarters and higher sales helped the Spam brand of canned meats owner to shield its margins from rising raw material input costs.
The company's adjusted profit of 41 cents per share for the quarter ended Jan. 28 topped analysts' estimates of 33 cents per share.
However, the Jennie-O turkey brand owner reaffirms its annual sales and profit forecast, reflecting a significant year-over-year decline in whole bird turkey markets.