May 29 - Hormel Foods ( HRL ) tightened its annual

profit forecast towards the lower end on Thursday, as the Skippy

peanut butter maker struggles with supply chain issues and weak

demand that may counter the benefits of its price hikes.

Like peer Tyson Foods ( TSN ), Hormel took consecutive price

hikes in the past to protect its margins from persistently high

commodity prices, as well as supply chain disruptions caused by

bird flu.

However, the higher prices come at a time when consumers are

reining in budgets as they brace for a possible economic

recession triggered by U.S. President Donald Trump's tariff

policies.

Earlier this month, Tyson Foods ( TSN ) saw weaker demand for its

products including beef, despite beating profit estimates during

its latest earnings.

Meanwhile, Hormel has also been facing constraints at its

retail and food-service segments due to reduced shipments of raw

materials such as beef and nuts, and lower production by

third-party manufacturers.

The factors led to a 7% decline in second-quarter sales

volumes in both retail and food service segments.

Hormel, which sells snacking and packaged meat products,

posted quarterly sales of $2.90 billion, compared with analysts'

estimates of $2.91 billion, as per data compiled by LSEG.

The company expects annual organic net sales to grow in the

range of 2% to 3%, compared with prior forecast of 1% to 3%

growth.

But it narrowed its annual adjusted profit to a range of

$1.58 to $1.68 per share, with the midpoint lower than that of

its previous forecast of $1.58 to $1.72 per share.

On an adjusted basis, it earned quarterly profit of 35 cents

per share, compared with analysts' estimates of 34 cents per

share.