Maple Leaf faces soaring fuel surcharges as higher feed costs lift poultry prices
The head of Maple Leaf Foods says the company is dealing with higher fuel and poultry prices while budget-conscious consumers constrain the company's ability to raise prices.
"We've seen more inflation enter the business than we have expected. That's accelerating," CEO Curtis Frank told analysts on a third-quarter earnings call Wednesday.
Fuel surcharges have gone up 17% since the second quarter, which Frank called a "pretty material change."
Poultry farmers, meanwhile, have raised prices for live birds by about 3% in the fourth quarter, "with very short advance notice," he added.
"Those are really the two components—feed and fuel," he said. "Inflation and agricultural commodities that are a direct implication of what we've seen from a conflict situation in the world."
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The continued closure of the Strait of Hormuz stemming from the war in the Middle East has disrupted oil shipments from the Gulf region—driving prices for fuel and other critical inputs such as fertilizer and animal feed higher.
That's on top of general inflation "in damn near everything else: labour, packaging and ingredients," Frank said.
The company is now expecting its full-year adjusted earnings before interest, taxes, depreciation and amortization to be at the lower end of its projected $520 million to $540 million range.
Maple Leaf raised prices earlier this year to help offset higher costs—the second such price increase in a year—but it hasn't been enough to mitigate rising expenses.
Frank said the company will have to do more to address overall general inflation early next year.
Grocers have entered their typical period of price freezes ahead of the holiday season, meaning they will not accept any cost increases between November and February, when consumers are more price sensitive.
Consumers, meanwhile, continue to hunt for deals and look for value in what they buy, Frank said.
"The consumer environment continues to be stressed and probably more so than we would have expected at the onset of this year: more sustained food inflation, more broad-based inflation overall, interest rates moving higher and a real demand for value," he said.
Maple Leaf, which spun off its pork business as Canada Packers Inc. last year, reported a third-quarter profit from continuing operations of $22.3 million as its sales edged higher compared with a year ago.
Its profit amounted to 18 cents per share for the quarter ended Sept. 30. The result compared with a profit of $23.3 million or 19 cents per share in the same quarter last year.
On an adjusted basis, Maple Leaf said it earned 36 cents per share in its latest quarter, up from an adjusted profit of 21 cents per share a year ago.
Sales for the quarter totalled $1.03 billion, up from $1.01 billion in the third quarter of 2025.
Maple Leaf says poultry sales increased 4.3%, while prepared food sales rose 1.3%.
RBC analyst Irene Nattel wrote in a client note that she is encouraged the company will remain within its guidance range for 2026.
While some are likely going to be disappointed with the tightened guidance, she said, "we remind investors of our forever caveat on (Maple Leaf): the road from here to there inevitably is bumpy."
