Hormel Foods stock plummeted approximately 13% on Thursday, poised to reach its lowest closing price in a decade.

Hormel Foods Corporation announced it will raise prices for its products as rising costs of meat, nuts, and other raw materials have eroded company profits.

Taking pork belly as an example, the company that produces Spam luncheon meat, Jennie-O turkey products, and Planters nuts said Thursday that pork belly costs used in bacon production have increased 30% compared to last year, while overall pork wholesale prices have risen 10%.

"The commodity market price increases were not only sudden but also extremely significant," said Jeff Ettinger, Hormel's interim CEO, during Thursday's conference call. "To address commodity inflation, we will implement targeted price increase measures."

Hormel is the latest company to warn that consumers may face rising prices for food and daily necessities, joining several other businesses that have issued similar warnings recently. Ace Hardware stated this week that rising costs due to the Trump administration's tariff policies could push up merchandise prices at thousands of Ace Hardware stores nationwide. Food giant J.M. Smucker, which owns Folgers and Café Bustelo coffee brands, also indicated that its coffee product prices will continue to rise.

Hormel reported quarterly profits on Thursday that fell short of analyst expectations, while the company lowered its profit guidance for the remainder of the year due to rising commodity costs. This news sent Hormel's stock price tumbling approximately 13%, potentially marking its lowest closing price in ten years.

The pork industry has been plagued by oversupply for years, and meat processing companies have now begun reducing hog slaughter volumes at their facilities. Government data shows beef prices have also reached historic highs due to cattle supply shortages, while tree nut and peanut prices similarly increased in June.

Hormel executives stated Thursday that declining restaurant industry business affected the company's sales to foodservice customers, with that segment experiencing a sales decline of more than 4%. Ettinger noted: "Restaurant traffic continues to decline."

For the three months ending July 27, the Austin, Minnesota-based company achieved profits of $183.7 million (33 cents per share), compared to $176.7 million (32 cents per share) in the same period last year.

Excluding certain one-time items, the company's earnings per share were 35 cents. Analysts surveyed by FactSet had previously expected earnings per share of 40 cents.

The company's quarterly sales increased 4.6% to $3.03 billion, exceeding Wall Street's expectation of $2.98 billion.

In May, Hormel Foods had already lowered the upper end of its full-year earnings per share guidance by several cents and indicated that tariffs could reduce earnings per share by 1 to 2 cents in the second half of the year. Meanwhile, the company slightly raised the lower end of its sales guidance, as executives anticipated strong growth across multiple segments of their food business empire in the second half of the fiscal year.

Ettinger previously served as Hormel's CEO from 2005 to 2016. He returned to the company this summer as interim CEO after former CEO Jim Snee announced his retirement. This return occurred against the backdrop of Hormel's declining profits and repeated underperformance since the company acquired Planters nuts business from Kraft Heinz for $3 billion in 2021.

Since early 2022, Hormel's stock price has fallen approximately 50%.