February 27, 2009

Sanderson Farms Inc. announced on Thursday (Feb 26) that its loss has widened in its fiscal first quarter as consumers ate less, hurting its sales of chicken meat to restaurants.

The producer of fresh and frozen chicken posted a loss of US$6.7 million, or US$0.33 per share, in the quarter ended January 31. In the year-ago quarter, Sanderson earned US$6.2 million, or US$0.30 per share.

Sanderson Farms' chief executive officer Joe Sanderson Jr. said demand for chicken products held steady in the retail grocery market, but the slowdown in restaurant traffic continues to adversely affect sales to our food service customers.

Revenue rose 7 percent to US$388.9 million from US$362.6 million; analysts expected US$368.4 million in revenue.

The company said chicken prices were mixed during the first quarter. Prices for whole chickens rose 13 percent, reflecting more sales in grocery stores, while prices for boneless breast meat pieces were down 9 percent, which Sanderson said fell because of less chicken consumed in restaurants.

Sanderson is not expecting demand to improve until the economy gains some traction and consumers resume spending and dining out again.