(Reuters) - Hormel Foods (NYSE:HRL) on Thursday cut its annual revenue and profit targets after missing quarterly results as the Skippy peanut butter maker wrestled with lower pork and turkey prices and sluggish demand in key market China.
After raising prices over the past several quarters to soften the hit from higher costs, Hormel was forced to reduce prices on items like raw bacon to match lower market prices, denting profits in its international and U.S. retail segments.
Peer Tyson Foods (NYSE:TSN) had also missed third-quarter expectations earlier this month and is exploring a sale of its poultry business in China to cut costs.
Shares of Hormel, which also forecast fourth-quarter sales below expectations, fell about 3% in premarket trade.
Segment profit from international operations tumbled 50% from a year earlier, with the company citing softness in China and lower branded export demand.
Hormel Foods now expects annual adjusted earnings per share between $1.61 and $1.67, compared with $1.70 to $1.82 forecast earlier.
The Austin, Minnesota-based company now expects a flat to 4% decline in annual net sales, compared with a rise of 1% to 3% expected earlier.
Operating margin fell to 7.3% in the quarter ended July 30 from 9.7% a year earlier.