Hormel Foods Corp. is feeling the effects of a tough quarter in Jennie-O Turkey Store.

“Jennie-O Turkey store had a difficult quarter versus last year,” CEO and President Jim Snee said in a conference call Wednesday morning.

The Austin-based company lowered it’s 2017 outlook Wednesday from $1.71 to $1.77 per share to $1.65 to $1.71 per share and reported flat overall net earnings for the quarter of $235 million.

“We are tempering our full year outlook for the Jennie-O Turkey Store segment given the shortfalls in the first quarter and the expected continuation of pricing pressure due to low commodity turkey prices. Improvements in our other segments are expected to offset some of the earnings headwinds from Jennie-O Turkey Store,” Snee said in a press release.

Hormel saw a 25 percent profit decline in Jennie-O’s first quarter, largely stemming from lower turkey commodity prices and increased operating expenses from facility upgrades, some to update biosecurity after the avian flu outbreak. Pricing pressure from competing proteins in foodservice, deli and retail also affected the quarterly results.

Overall, Hormel’s sales dropped 1 percent to $2.3 billion in the quarter, though the company posted record diluted earnings of 44 cents per share, up 2 percent.

Snee said the company knew it would face challenges in the first quarter, but he said several factors created a difficult operating environment with lower yields in some plant operations and low turkey prices due to an oversupply.

But Hormel touted its balanced business model as a reason the company has been able to largely weather the market challenges, as Snee said three of Hormel’s five segments saw earnings growth in the quarter.

“The balanced model we have intentionally built in our business will allow us to overcome the challenges at Jennie-O Turkey Store,” Snee said in a press release. “I remain confident in our team’s ability to deliver sales and earnings growth by supporting our brands, innovating and making strategic investments.”

Asked if the challenges of the quarter will adjust how the company moves forward into the coming years, Snee expressed confidence that Hormel, and specifically Jennie-O, will emerge stronger after the market eventually levels out.

“We’re in a market cycle; that cycle will correct,” Snee said.

“We just have to get through this cycle and we will,” he added.

Snee assured investors the company’s long-term outlook remains strong.

“We do believe that this business is going to rebound and emerge stronger,” he said.

Snee referenced several positive signs moving forward, as he said the Jennie-O brand continues to be strong and in demand. Hormel also expects its plant in Jiaxing, Zhejiang province in China to begin producing Spam in the third quarter, and they expect relief coming for China pork prices.

Hormel segments in the quarter:

•Grocery Products, 18 percent of net sales, saw sales increase 7 percent on the addition of Justin’s specialty nut butters along with strong sales of Wholly Guacamole dips, Skippy peanut butter products, and Herdez salsa. Non-GAAP1 adjusted sales increased 3 percent. Segment profit was up 1 percent. Grocery Products increased advertising to support key brands such as Wholly Guacamoledips and Herdez salsa.

•Refrigerated Foods, 49 percent of net sales, saw segment profit increase 4 percent driven by solid value-added product growth in Hormel’s foodservice and retail channels; however, sales declined 3 percent, primarily related to the divestiture of the Farmer John business in January 2017. Products such as Hormel pepperoni and Hormel Bacon 1TM fully cooked bacon, and retail products such as Hormel Gatherings party trays and Hormel Natural Choice meats had excellent sales growth this quarter.

•Jennie-O Turkey Store, 19 percent of net sales, saw profit decrease 25 percent, while sales increased 13 percent and volume increased 22 percent.

•Specialty Foods, 8 percent of net sales, saw flat profit, while sales declined 19 percent, primarily due to the divestiture of Diamond Crystal Brands.

•International & Other, 6 percent of net sales, saw profit increase 5 percent, while sales decreased 2 percent as strong fresh pork exports offset declines in branded exports. High pork raw material costs continued to impact the profitability of the company’s China meat business.