Volume and sales decreased for the quarter as lower retail and foodservice sales were not fully offset by improved results in the commodity and whole-bird businesses. The decline in segment profit was driven by the divestiture of CytoSport, the impact of significantly higher avocado costs and lower Skippy ® peanut butter pricing. On an organic basis, strong sales of the SPAM ® family of products, Don Miguel ® branded items, Dinty Moore ® stew and Herdez ® salsas and sauces more than offset lower sales of Skippy ® peanut butter. Volume and sales decreases were related to the divestiture of CytoSport. Net sales down 11% organic net sales 1 up 1%.Volume down 10% organic volume 1 up 1%.Favorable operational expenses and higher commodity profits also contributed to the earnings growth. Segment profit increased significantly primarily due to improved profitability for value-added products. Retail sales of Hormel ® Black Label ® convenience bacon and Columbus ® branded deli items also contributed to overall growth. Volume declined slightly for the quarter, attributed to price increases on value-added items. Sales increased on strong demand for foodservice items such as Hormel ® Bacon 1™ cooked bacon, Old Smokehouse ® premium raw bacon and Hormel ® Fire Braised TM products. exports continue to be impacted by global trade uncertainty." "Our International team made progress growing the SPAM ® and Skippy ®brands in China while U.S. "The Jennie-O Turkey Store team is working diligently to regain lean ground turkey distribution following the two voluntary product recalls," Snee said. However, the disappointing bottom-line performance for Grocery Products was driven by higher avocado costs in our MegaMex joint venture and lower results for our Skippy ®peanut butter spreads business." Many of our established brands in Grocery Products continue to outpace center store growth. "Refrigerated Foods effectively managed sales growth and profitability in the midst of volatile input costs caused by African swine fever. "Double-digit earnings growth in Refrigerated Foods offset weaker results in Grocery Products," Snee said. "Our team also grew sales across many core brands such as SPAM ®, Dinty Moore ®, Mary Kitchen ® and Old Smokehouse ®." & Jelly Minis, and Herdez ® salsas all delivered strong sales growth," Snee said. "Innovative branded product lines such as Hormel ® Bacon 1 TM cooked bacon, Hormel ® Fire Braised TM products, Skippy ®P.B. The fundamentals of our company are strong, and we remain focused on delivering our key results as we navigate near-term commodity market uncertainty." "Disciplined pricing, strategic promotional activity, effective advertising and insight-led innovation all played a positive role in our performance. "We delivered earnings in line with our expectations this quarter as our experienced management team reacted quickly and appropriately to rapidly changing market conditions," said Jim Snee, chairman of the board, president and chief executive officer.
Fiscal 2019 earnings guidance reaffirmed at $1.71 to $1.85 per share.
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