Sanderson Farms Inc. reports a net loss of $38.6 million, or, $1.76 per share, for the first fiscal quarter compared with a net loss of $17.8 million, or 82 cents per share, for the first quarter of fiscal 2019.,
Net sales were $823.1 million, compared with $743.4 million for the same period a year earlier.
Stocks for Laurel-based Sanderson, the nation’s third-largest producer of poultry, stood at $121.25 at the end of trading on the NasdaqGS market on Tuesday, down $3.23 from the previous day. Sanderson shares have ranged from $117.17 to $179.45 over the past 52 weeks.
The poultry market continues to battle itself, with a glut of production.
Still, the industry could be looking at a bright 2020 — thanks to the chicken-sandwich craze, according to Joe Sanderson Jr., chief executive officer. The sandwich wars among fast-food companies could bailout the oversupplied U.S. poultry industry, Sanderson told Bloomberg News.
A social media frenzy has pulled Americans into sandwich obsession. Popeyes quickly ran out of its new, instantly iconic chicken sandwiches when they were launched nationwide last August. The fervor ignited a marketing battle and will be a catalyst for an onslaught of competing products, Sanderson predicted in a call with analysts.
Fast-food restaurants “have to get into the ball game,” Sanderson said. “They cannot sit still and allow two people to dominate the chicken-sandwich segment.”
Overall market prices for poultry products were lower during the first quarter compared with the same period last year, the company said in a news release.
“We have several reasons to remain optimistic about poultry markets in 2020,” Sanderson continued.
“ With respect to domestic markets, we expect to see continued favorable demand in retail grocery stores. Chicken remains favorably priced compared to other proteins, and we believe that dynamic will continue.
With respect to the export markets, the outbreak of African swine fever in China has affected the worldwide supply of pork, creating a significant protein deficit that should ultimately benefit poultry markets in the United States.
China lifted its nearly five-year ban on the import of United States poultry at the end of calendar 2019, and we resumed shipments to China almost immediately.
“While the devastating [coronavirus] is currently disrupting the markets, depressing demand, negatively affecting shipping and supply chain logistics and slowing China’s economic growth rate, we believe demand for protein from China is strong, and we expect to benefit in 2020 from the return to an open market.”
BEFORE YOU GO…
… we’d like to ask for your support. More people are reading the Mississippi Business Journal than ever before, but advertising revenues for all conventional media are falling fast. Unlike many, we do not use a pay wall, because we want to continue providing Mississippi’s most comprehensive business news each and every day. But that takes time, money and hard work. We do it because it is important to us … and equally important to you, if you value the flow of trustworthy news and information which have always kept America strong and free for more than 200 years.
If those who read our content will help fund it, we can continue to bring you the very best in news and information. Please consider joining us as a valued member, or if you prefer, make a one-time contribution.Click for more info