Shares of Hormel Foods Corp. sank 4.6% in premarket trading Thursday, after the branded foods company, which brands include Planters, Skippy and Spam, reported fiscal third-quarter profit that matched expectations, while record revenue beat, but cut its full-year earnings guidance, as the company managed through inflationary pressure and labor availability challenges. Net income fell to $177.1 million, or 32 cents a share, from $203.3 million, or 37 cents a share, in the year-ago period. Excluding nonrecurring items, earnings per share came to 39 cents, matching the FactSet consensus. Sales grew 20.2% to $2.86 billion, above the FactSet consensus of $2.73 billion, while cost of products sold increased 24.6% and gross margin fell to 14.8% from 17.7%. For fiscal 2021, the company cut its EPS guidance range to $1.65 to $1.69 from $1.70 to $1.82 but raised its sales outlook to $11.0 billion to $11.2 billion from $10.2 billion to $10.8 billion. “We saw significant inflationary pressure in almost all areas of our business, including raw materials, packaging, freight, labor and many other inputs during the quarter,” said Chief Executive Jim Snee. “We have implemented pricing actions across virtually every brand, which has been our main lever to offset these inflationary pressures.” The stock has lost 7.2% over the past three months through Wednesday, while the S&P 500 has gained 7.5%.
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