Hormel Foods Corporation ( HRL ) shares are trading lower on Thursday.

The company reported second-quarter adjusted earnings per share of 35 cents, beating the Street view of 34 cents.

Quarterly sales of $2.90 billion (+0.4% year over year) missed the analyst consensus estimate of $2.91 billion. Organic net sales were up by 1%.

Gross profit in the quarter under review decreased to $484.433 million from $503.806 million a year ago.

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International segment profit decreased as a temporary shift in export customer mix and softness in Brazil primarily offset meaningful net sales growth.

Retail sales inched lower by 0.3% year over year to $1.783 billion, Food service sales gained 0.5% year over year to $936.44 million, and International sales gained 7% to $178.53 million.

Adjusted operating income in the quarter under review was $264.90 million, lower than $275.91 million. Adjusted Operating Margin in the quarter under review decreased to 9.1% from 9.6% in the year-ago period.

The company exited the quarter with cash and equivalents worth $669.69 million.

Inventories surged to $1.729 billion from $1.576 billion at the end of Oct. 27, 2024.

“We anticipate strong second-half growth,” said CEO Jim Snee, highlighting contributions from the turkey portfolio, continued momentum in the Planters brand, growth from leading positions in the marketplace, and ongoing benefits from Transform and Modernize.

Outlook: Hormel Foods ( HRL ) narrowed its FY2025 adjusted EPS guidance to $1.58–$1.68 from the prior range of $1.58–$1.72, compared to the $1.61 estimate.

The company raised its FY2025 sales outlook to $12 billion–$12.20 billion from $11.90 billion–$12.20 billion, versus the $12.12 billion estimate.

HRL Price Action: Hormel shares are trading lower by 0.92% to $29.77 at publication on Thursday.

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