(Reuters) - Skippy peanut butter maker Hormel Foods (NYSE:HRL) forecast fiscal year 2024 profit below estimates on Wednesday as consumers reduce spending on its pricier meat products and ready-to-eat meals as well as pressure on its retail business.
The company, like many packaged goods companies, raised product prices to offset higher costs, which has led price-sensitive shoppers, already grappling with high living costs, to pare back spending.
The Austin, Minnesota-based company has ramped up promotions in its retail channel to attract cost-conscious customers.
Hormel has seen demand lagging in the key market of China along with a lower appetite for its branded goods in other international markets.
"Looking ahead, our teams continue to navigate through a dynamic operating environment characterized by slowing consumer demand, inflationary pressures and headwinds in our turkey business," said Jim Snee, Hormel CEO.
Hormel now expects fiscal 2024 adjusted earnings per share between $1.51 and $1.65, compared with estimates of $1.68, per LSEG data.
Sales at Hormel's retail business, its biggest segment that accounted for about 60% of total net sales, fell 4%, with volumes down 3%.
The company had flagged earlier that it had lost some turkeys due to hot weather in the Midwest during the second half of August and the beginning of September, which would impact the fourth quarter.
Peer Tyson Foods (NYSE:TSN) forecast revenue for its next fiscal year below Wall Street estimates earlier in November after fourth-quarter sales missed expectations due to falling chicken and pork prices and slowing demand for its beef.
Hormel posted sales of $3.2 billion in the fourth quarter ended Oct. 29, slightly below analysts' average estimate of $3.26 billion, as per LSEG data.
Excluding items, the company earned 42 cents per share, compared with estimates of a profit of 44 cents per share.