Hormel Foods Corp. is cutting its full-year revenue outlook after quarterly sales missed estimates on Thursday.
The Austin, Minn.-based food company trimming its full-year revenue forecast to $9.4 billion to $9.6 billion, down from $9.7 billion to $10.1 billion.
Hormel (NYSE: HRL) also said it expects to see a four-to-six cent per share hit to annual earnings, mainly due to China’s increased tariffs on U.S. pork products. (The current year will be less than that — about 1 to 2 cents per share — and Hormel kept its full-year earnings estimate of $1.85-$1.95 per share).
China raised the tariffs in April in retaliation for higher U.S. tariffs on imported aluminum and steel.
Minnesota is the nation’s No. 3 pork-producing state, and so is particularly exposed to Chinese tariffs on food products. (China has also slapped counter-tariffs on soybeans, another big Minnesota agribusiness product.)
“We do see risk from tariffs, which could negatively impact fresh pork exports and the (international) segment’s results,” said Hormel CEO James Snee on a post-earnings call with analysts.
U.S. and Chinese officials are currently in talks over resolving the trade fight, but expectations are low, Bloomberg reports. Another round of tariffs and counter-tariffs went into effect Thursday, covering an additional $16 billion in goods.
Hormel’s quarterly sales of $2.36 billion slightly missed estimates of $2.38 billion; it’s the third consecutive quarter that Hormel has come in below revenue estimates, according to Reuters.