AUSTIN, MINN. —Sales declined at Hormel Foods Corp. in its fiscal third quarter, ended July 28, as the company worked through pressure on whole-bird turkey prices and other factors in the food processing industry.

Hormel reported net earnings of $176.7 million, equal to 32¢ per share on the common stock, up almost 9% from $162.6 million, or 30¢ per share, in the previous year’s third quarter. Sales declined 2.4% to $2.89 billion from $2.96 billion during the same period last year. Volume decreased 6.9% to 1.02 billion lbs from 1.09 billion lbs.

“We delivered solid third-quarter results and another quarter of better-than-expected earnings,” said Jim Snee, chairman of the board, president and chief executive officer of Hormel. “Many of our key retail brands are growing, outperforming their categories and, most importantly, resonating with our customers and consumers. Our Foodservice business continued to deliver above-industry growth, highlighting the importance of our solutions-based portfolio, direct selling team, and diverse customer and operator base. We again experienced significant recovery in our International segment, led by our global brands. Lastly, we continued to realize growing benefits from our transform and modernize initiative, creating impactful improvements across our supply chain.”

In Hormel’s Retail segment, net sales declined approximately 7% to $1.77 billion from $1.89 billion in the previous year’s third quarter. Volume was down 9% and pricing declines for its Jennie-O Turkey Store whole bird turkeys, lower sales of Planters snack nuts resulting from production disruptions at the Suffolk, Va., facility, and lower center-store and contract manufacturing volumes. The company said offsets in these declines came from net sales growth in key brands like Hormel Black Label Bacon, Applegate, Jennie-O ground turkey, Skippy, Wholly guacamole, Herdez salsa and sauces and Hormel Square Table entrees.  

Hormel reported some positive news in the foodservice segment in the third quarter with net sales up 7% to $954 million from around $891 million in 2023. Volume was also up 2% at 259.9 million lbs from 255.8 million lbs the previous year.

“Volume and net sales growth were driven primarily by strong performance across the turkey, premium prepared proteins, bacon, and pepperoni categories,” the company said in its earnings statement.

Some products noted by Hormel included its Fire Braised meats, Hormel Bacon 1 cooked bacon, Café H globally inspired proteins and Rosa Grande premium pepperoni delivered volume and net sales growth. The report also showed growth in branded Jennie-O turkey items in foodservice, which continues to benefit its top-line results.

“Our team remains focused on finishing the year strong and executing on our strategic priorities,” Snee said. “In the fourth quarter, we expect continued momentum across many of our key retail brands, growth within our Foodservice and International businesses, improved service levels for the Planters snack nuts business, and further advancements of our transform and modernize initiative.”

In International, sales fell 2% to $177 million from $180 million. Volume was down 13%.

“Robust volume and net sales growth for Spam luncheon meat, refrigerated foodservice exports, and Skippy peanut butter exports were more than offset by the difficult comparison in the prior year to higher export volumes of low-margin commodity fresh pork and turkey,” the company noted. “Segment profit increased significantly in the current quarter, driven by improved export margins, growth from our investments in the Philippines and Indonesia, and favorable costs in China.”

Hormel plans to aggressively develop its global presence by launching new snacking innovations in China during the third quarter to help support its retail recovery. It also said that SPAM luncheon meat delivered a second consecutive quarter of double-digit top line growth in its shipments to Canada, Southeast Asia and Japan.

Hormel companywide, in the nine months ended July 28, reported net earnings of $584.8 million, or $1.07 per share on the common stock, which was down 2.1% from $597.6 million, or $1.09 per share, at the same time of the previous year. Sales declined 1.5% to $8.78 billion from $8.91 billion.