May 30 (Reuters) - Hormel Foods missed market expectations for second-quarter sales on Thursday as the Wholly dips maker grapples with weakness in its mainstay retail business, offsetting steady demand for its higher-priced meat products.
Shares of the Planters brand owner were down about 7% as the company reported total volume decline of 3.6%.
Sales at Hormel's retail business, its biggest segment that accounts for about 62% of total net sales, fell 7%, with volumes down 5% in the quarter ended April 28.
The company said the sales decrease was due to volume and pricing decline for whole turkeys and weak demand for ready-to-eat meals.
Sales at the company's food service business, however, grew 6% in the quarter, helped by higher volume sales of its bacon, premium prepared protein and turkey categories.
While the company maintained its annual sales target, it now expects 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.
The company said it was benefiting 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, quarterly net sales fell 3% to $2.89 billion, missing analysts' average expectations of $2.97 billion.
Reporting by Anuja Bharat Mistry in Bengaluru; Editing by Shreya Biswas
Source: Reuters