Hormel Foods Corporation ( HRL ) shares are trading lower on Wednesday following a revised fiscal year 2024 outlook due to production disruptions.

The company reported third-quarter adjusted earnings per share of 37 cents, beating the analyst consensus of 36 cents.

Quarterly sales of $2.898 billion (down 2.2%) missed the street view of $2.95 billion. Adjusted operating margin in the quarter under review contracted to 9.2% from 9.7% a year ago.

“Many of our key retail brands are growing, outperforming their categories and, most importantly, resonating with our customers and consumers,” said Jim Snee, chairman of the board, president and chief executive officer. 

In the Retail segment, volume decreased by 9%, net sales fell by 7%, and segment profit dropped by 15%.

Also Read: How To Earn $500 A Month From Hormel Foods Stock Ahead Of Q3 Earnings Report

In the Foodservice segment, volume increased by 2%, net sales rose by 7%, while segment profit declined by 3%. Hormel Foods’ CEO highlighted that the Foodservice business continued to achieve above-industry growth, underscoring the value of the company’s solutions-based portfolio, direct selling team, and diverse customer and operator base.

In the International segment, volume decreased by 13%, net sales fell by 2%, but segment profit surged by 78%. The CEO also noted significant recovery in the International segment, driven by global brands, and emphasized the growing benefits from the company’s transformation and modernization initiatives, which have led to substantial improvements across the supply chain.

The company exited the quarter with cash and equivalents worth $561.93 million.

Outlook: Hormel Foods ( HRL ) expects its fiscal year 2024 net sales to range between $11.8 billion and $12.1 billion, down from the previous range of $12.2 billion to $12.5 billion, and slightly below the $12.14 billion estimate.

The company anticipates adjusted earnings per share to be between $1.57 and $1.63, compared to the prior range of $1.55 to $1.65, and the $1.60 estimate.

The company is experiencing production disruptions at its Suffolk, Virginia, facility and is assessing the financial impact related to storm damage at its Papillion, Nebraska, facility.

In the fourth quarter, the firm expects continued momentum across many of its key retail brands, growth within the Foodservice and International businesses, improved service levels for the Planters snack nuts business, and further advancements of its transform and modernize initiative.

Price Action: HRL shares are trading lower by 5.55% to $31.30 premarket at last check Wednesday.

Read Next:

Top 2 Real Estate Stocks That Could Blast Off This Quarter