Skippy peanut butter maker Hormel Foods topped market expectations for first-quarter sales and profit, helped by resilient demand for its high-priced meat products and ready-to-eat meals.
Overall volumes of Hormel Foods grew 4% in the quarter, for products like Chi-Chi's salsa, Hormel Natural Choice bacon among others, as more consumers preferred cooking meals at home.
Shares of Austin, Minnesota-based company, which fell nearly 30% last year, were up about 6% in premarket trading.
Earlier this month, larger rival Tyson Foods, also reported a rise in sales with steady demand for its pork business.
"We delivered strong results in the first quarter, led by better-than-expected performance in each of our business segments and progress against our transformation and modernisation initiative," said Jim Snee, chairman of the board, president and chief executive officer.
Quarterly Highlights
For the first-quarter, Hormel Foods posted net sales of $3 billion, compared with analysts' average estimate of $2.91 billion, according to LSEG data.
A significant price hike in previous quarters and higher sales helped the Spam brand of canned meats owner to shield its margins from rising raw material input costs.
The company posted adjusted profit of 41 cents per share for the quarter ended 28 January, compared with analysts' estimates of 33 cents per share.
However, the Jennie-O turkey brand owner reaffirms its annual sales and profit forecast, reflecting a significant year-over-year decline in whole bird turkey markets.
Snee added, "We expect continued growth in foodservice, improvement in our international business, impacts from pricing and innovation in retail, and further progress on our transformation and modernisation initiative.
"Our teams remain focused on our strategic priorities and delivering on our commitment to improve our business and drive long-term shareholder returns."
News by Reuters, additional reporting by ESM.
