Hormel Foods Corporation released its first quarter results Thursday morning as well as announcing that it is acquiring Texas-based Sadler’s Smokehouse.

The company announced that pretax earnings dropped by five percent at $290 million, a reflection of the divestiture of CytoSport. It was also reflected in an overall drop of Grocery Products, which saw an 11 percent drop in net sales.

However, Refrigerated Foods saw an increase, up six percent in net sales.

“The Refrigerated Foods business model performed as anticipated, given the volatile commodity market conditions,” said Chairman of the Board, President and Chief Executive Officer Jim Snee in a press release issued Thursday. “Growth was driven by another strong quarter from our foodservice team and higher commodity profits. Volatile pork and beef trim prices also impacted profitability across many product lines in Grocery Products.”

The outlook for 2020 shows a projected net sales guidance of $9.50 to $10.30 billion.

Overall, the company reported that it remains in a strong financial position with limited debt and consistent cash flows.

The acquisition of Sadler’s Smokehouse, based out of Texas, is an opportunity for Hormel to further diversify its portfolio while tapping into the authentic barbecue trend happening throughout the nation.

“Sadler’s Smokehouse is a great company with an impressive history, talented team and an outstanding portfolio of on-trend products that resonate with consumers, customers and operators,” Snee said in a separate press release. “This is a very strategic acquisition for our foodservice business and it gives us another successful brand to expand into the retail and deli channels.”

The acquisition is expected to go through in March 2020, subject to customary closing conditions, for a purchase price of $270 million.

Sadler’s will continue to operate out of its headquarters in Henderson, Texas.