Smithfield Foods cut its outlook for the year, as inflation-weary consumers continue to be choosier in the grocery store and higher costs pressure operations.

Chief Executive Shane Smith said Tuesday that consumers are buying less pork and fewer hams as they face persistent inflation.

At the same time, the owner of Farmer John bacon and Eckrich smoked sausage said costs are elevated and likely to remain that way for the rest of the year. Higher fuel and freight costs pressured profit during the recent quarter, though increased operational efficiencies helped offset the weight.

"Based on what we know today, we believe it is appropriate to update our 2026 outlook to reflect the current macroeconomic backdrop, while continuing to invest in the strategies that positioned Smithfield for long-term growth," Smith said.

Smithfield now expects total sales to be roughly flat this year, compared with a prior forecast of up low-single-digits. Analysts polled by FactSet were looking for sales of $15.72 billion, representing a 1.2% increase year over year.

The company also cut its full-year adjusted operating profit outlook to between $1.23 billion and $1.38 billion, from $1.33 billion to $1.48 billion. Analysts had modeled $1.4 billion.

Shares were recently trading 3.6% lower, at $23.56. Despite the decline, the stock is up 6.4% year to date.

Smithfield's new outlook came as the company reported second-quarter sales of $3.7 billion. That is down 2.3% from a year ago, but the decrease wasn't as steep as Wall Street expected.

The company said it grew market share despite operating in a difficult environment, outperforming category trends and expanding distribution to reach more consumers. The company also continues to invest in its brands, working on new offerings such as pre-cooked deli meat lunches and a portable nacho kit.

"While persistent inflationary pressures continue to influence consumer demand and input costs, we are approaching the balance of the year with discipline, confidence and a clear plan," Smith said.

For its three months ended June 28, Smithfield posted a profit of $238 million, or 60 cents a share, compared with a profit of $188 million, or 48 cents a share, a year earlier. On an adjusted basis, quarterly earnings of 62 cents a share topped analyst estimates of 60 cents a share.