Hormel Foods Inc reported lower quarterly earnings and forecast a "challenging operating environment" for this year, becoming the latest U.S. food company to see weak sales in grocery aisles.
Hormel, which makes Spam canned meat and Dinty Moore stew, said sales should improve as the year goes on, helped by new advertising campaigns.
The company stood by its full-year earnings forecast of $1.79 to $1.89 per share.
Shares of Hormel were down 1.5 percent at $28.59 in morning trade on the New York Stock Exchange.
Hormel said net income was $128.4 million, or 48 cents per share, in the first quarter ended on Jan. 29, down from $148.8 million, or 55 cents per share, a year earlier.
Analysts on average were expecting 48 cents per share, according to Thomson Reuters I/B/E/S.
Operating profit fell 9 percent in the grocery products segment, hurt by lower volumes and higher raw material costs. Profit in the refrigerated foods segment tumbled 44 percent, due mostly to lower pork operating margins.
Profit rose 4 percent in the company's Jennie-O Turkey Store segment, but fell 4 percent in the specialty foods segment due to higher raw material and freight costs.
Net sales rose 6 percent to $2.04 billion. Sales by volume fell 2 percent.