Hormel Foods (NYSE:HRL) beat market expectations for second-quarter profit on Thursday and raised the lower end of its full-year earnings as the Wholly dips maker sees steady demand for higher-priced meat products.
The Spam brand owner expects an annual adjusted earnings per share in the range of $1.55 to $1.65, compared with its prior forecast of $1.51 to $1.65. Analysts on average were expecting a profit of $1.58 per share.
Sales at its food service business grew 6% in the quarter, helped by higher volume sales of its bacon, premium prepared protein and turkey categories.
The company also said it benefited from lower logistics and supply chain costs.
Hormel Foods posted an adjusted profit of 38 cents per share for the quarter compared with analysts' average estimate of 36 cents per share, according to LSEG data.
Overall, however, net sales fell 3% to $1.06 billion in the second quarter ended April 28, as its retail business - the biggest unit - declined due to lower volumes and pricing for its whole turkey business.
Shares of the Austin, Minnesota-based company, which has risen nearly 6% so far this year, climbed about 1% in premarket trading.
