Skippy peanut butter maker Hormel Foods cut its annual sales forecast on Wednesday, hurt by lower commodity prices and a production disruption at its Planters brand manufacturing facility in Virginia, reported Reuters. 

Hormel's shares were down about 5% in premarket trading. The company also missed market expectations for third-quarter sales and narrowed its annual adjusted profit target.

Lower commodity prices for high-volume export products such as turkey and fresh pork have weighed significantly on Hormel's business.

A food safety issue at its facility in Suffolk, Virginia, which makes the Planters brand of snacks, also took a toll on US retail volumes in the quarter ended July 28, which fell 9%.

Hormel said it now expects an impact of 6 cents per share related to the disruption for the fiscal year ending October 2024. It is also assessing the financial impact of storm damage at its facility in Papillion, Nebraska, it added.

The Austin, Minnesota-based company expects net sales of $11.8 billion-$12.1 billion for fiscal 2024, down from its prior forecast of $12.2 billion-$12.5 billion.

Its quarterly net sales fell 2.2% to $2.90 billion, missing analysts' average estimate of $2.95 billion, as per LSEG data.

Still, budget-conscious consumers making more meals at home helped drive demand for several key Hormel brands such as Jennie-O lean ground turkey and Applegate's meats, as well as sauces and snacks, partially offsetting overall declines.

Peer Tyson Foods topped market expectations for revenue and profit in August as demand recovered for its packaged meats and cold cuts and on leaner inventory, such as in its chicken supplies.

Excluding items, Hormel Foods earned 37 cents per share for the third quarter. Analysts had expected 36 cents per share.

The company expects annual adjusted earnings per share between $1.57 and $1.63, compared with the $1.55 to $1.65 per share forecast earlier.