Hormel Foods Corporation (NYSE:HRL) reported mixed results for the fiscal third quarter, but lowered its FY24 sales guidance below Wall Street's expectations, driving shares sharply lower ahead of Wednesday's regular open.

To reflect lower-than-expected prices for turkey and pork, production disruptions at its Suffolk, Virginia facility due to a listeria-related recall, and declines in its manufacturing business, Hormel (HRL) is now expecting sales to be within the range of $11.8B to $12.1B from previous guidance of $12.2B to $12.5B. This falls below the consensus estimate of $12.13B. The company's profit guidance was narrowed to $1.57 to $1.63 per share from $1.55 to $1.65 per share, straddling the estimated $1.59 per share.

For the current reported quarter, retail volume was down 9% and net sales declined 7%, resulting in a 15% decline in segment profit. In the company's foodservice segment, volume and sales were up 2% and 7%, respectively, although profit was down 3% as higher sales were more than offset by higher SG&A expenses.

International sales were down 2%, and while volume was 13% lower year-over-year, segment profit improved significantly by 78% driven by improved export margins, growth in investments in the Philippines and Indonesia, as well as favorable costs in China.

In FQ3, Hormel (HRL) earned an adjusted profit in FQ3 of $0.37 per share, down from $0.40 a year ago but a penny better than expectations. Total sales were down 2% to $2.9B, $60M less than estimates. The company's adjusted operating margin of 9.2% narrowed by 50 basis points from the same quarter last year.