Hormel Foods CEO Jim Snee said Thursday that the Austin-based owner of Skippy peanut butter and SPAM would temper its full-year outlook, largely due to “shortfalls” in the first quarter related to its Jennie-O turkey brand.
 
Hormel shares fell as much as 7.5 percent in reaction to the company shaving 6 cents off its fiscal 2017 guidance. Its outlook now stands at $1.65 per share.
 
Turkey prices hit a seven-year low over the holiday period, Snee told the Star Tribune. Despite Jennie-O posting a 13 percent gain in sales and 22 percent gain in volume sold, Hormel’s turkey business struggled to overcome the pressure from lower-than-expected commodity prices and increased operating expenses. Profits at Jennie-O ultimately sunk 25 percent during the three-month period ending January 27 from $91.3 million a year ago to $68.1 million.
 
Nevertheless, Snee expressed confidence in Hormel’s ability to drive earnings growth in its other brands.
 
“The balanced model we have intentionally built in our business will allow us to overcome the challenges at Jennie-O Turkey Store,” he said in a statement. “Improvements in our other segments are expected to offset some of the earnings headwinds from Jennie-O Turkey Store.”
 
Overall sales in Hormel’s first quarter totaled $2.28 billion, a slight drop from the $2.9 billion it posted a year ago. The company’s profits remained flat year-over-year at $235 million, or 44 cents per share.
 
Wall Street had estimated 46 cents per share for the quarter.