AUSTIN, MINN. — “Better than expected” is how James P. Snee, chairman, president and chief executive officer of Hormel Foods Corp., described first-quarter results. Supporting his statement was volume growth of 2%, 8% and 11% in the company’s Retail, Foodservice and International business units, respectively.

“We grew volume in each of our segments with overall volume increasing 4%,” Snee said during a Feb. 29 conference call with securities analysts to discuss the quarterly results.

Net income for the quarter ended Jan. 28 was $219 million, equal to 40¢ per share on the common stock, and flat when compared to the same period of fiscal 2023 when the company earned $218 million, equal to 40¢ per share.

Sales also were flat at $2.99 billion in 2024 versus $2.97 billion the year before.

Snee’s better-than-expected comment stemmed from late November when Hormel Foods published its fiscal 2023 results when he said they did not meet expectations, and that fiscal 2024 would be a year of investment.

“Results this quarter were very encouraging, particularly given the challenging conditions the team faced in fiscal 2023,” he said.

In Hormel’s Retail business unit, its largest, the 2% volume growth was led by Jennie-O Turkey Store, Skippy, Planters, Herdez, La Victoria and Hormel pepperoni.

Addressing its Jennie-O Turkey Store supply challenges that have hindered the poultry industry for the past several years due to the spread of highly pathogenic avian influenza (HPAI), Jacinth Smiley, executive vice president and chief financial officer, said inventory levels have recovered and a bright spot has been in the company’s fresh ground turkey category. Meanwhile, the whole bird turkey business continues to lag.

“Barring a significant supply disruption this spring from additional outbreaks of HPAI, we are in a strong position to service our customers and attract new business opportunities. We made good progress regaining value-added Turkey distribution in the retail and foodservice channels during the first quarter, and we expect this to continue for the rest of fiscal 2024,” she said.

Retail segment quarterly sales fell 2.4% to $1.91 billion, and its profit fell 3.3%, according to the company. Weighing on Retail’s performance was volatility in the market for whole bird turkeys, which the company said may continue throughout the year.

Foodservice segment sales rose 9.4% to $913 million from $834.7 million, and business profits rose 10% to $150.1 million.

“We continue to operate from a position of strength in foodservice due to our long-standing relationships, differentiated product portfolio, innovative solutions and direct sales team,” Snee said.

During the call an analyst noted there are some indicators the foodservice category may be weakening. Snee responded that the company is monitoring the situation but added that Hormel’s foodservice business extends beyond traditional restaurant outlets to commercial business as well as convenience stores.

“We’ve spent a lot of time talking about c-stores (and how they) continue to grow,” Snee said. “Obviously, the acquisition and execution against the Planters brand helps us in that regard.”

International segment sales fell 3.3% during the quarter to $172.6 million, and business unit profit rose less than 1% to $20 million.

“Results this quarter were very encouraging, particularly given the challenging conditions the team faced in fiscal 2023,” Snee said. “We remain confident the International business will further accelerate over the course of the year, driven by more normalized shipments of Spam and easing of headwinds impacting our commodity exports and growth from our partnerships around the world.”

Based on the first-quarter results, Hormel Foods reaffirmed its guidance for the rest of fiscal 2024, with sales growth of 1% to 3% and to come in between $12.2 billion and $12.5 billion. Adjusted diluted net earing per share are expected to be in a range of $1.51 per share and $1.65 per share.