Packaged foods maker Hormel Foods Corporation (HRL) reported second quarter earnings Thursday morning that showed higher costs cutting into profits even with a nearly 7 percent growth in revenue.

For the quarter, Austin, Minnesota-based Hormel, the maker of products like its namesake chili, Dinty Moore stew and Spam canned pork, reported total sales of $2.15 billion, versus $2.01 billion in the second quarter last year. Profit during the latest quarter was $125.5 million, or 46 cents per share, lower than last year’s $127.9 million, or 48 cents per share.

Wall Street was expecting EPS of 49 cents on revenue of $2.19 billion.

Operating profit in the company’s grocery products segment, which include Chi-Chi’s Mexican products, Spam and more, improved 10 percent on 47 percent higher volume, largely because of the acquisition of the Skippy peanut butter brand and Don Miguel products. Hormel spent about $700 million earlier this year to buy Skippy from Unilever NV (UN). In the second quarter, $9 million in one-time costs associated with the acquisition negatively impacted earnings.

Refrigerated foods, the largest component of total sales, which include things like Lloyd’s ribs and Hormel bacon, saw a 2 percent decline in sales to $1.01 billion, but 3.2 percent increase in profit to $54.68 million.

Specialty foods profits rose 24 percent to $25.97 million on a 7.3 percent increase in sales to $245.69 million, led by sales of ingredients, ready-to-drink beverages, nutritional products and sugar.

Higher grain costs and weaker commodity turkey prices clipped sales in the Jennie-O Turkey Store segment. Sales declined 1.6 percent to $384.74 million and profits fell 25.9 percent to $51.2 million.

The real stinger was a 16 percent leap in selling, general and administrative costs from $148.69 million to $173.07 million. Input costs rose $122.6 million, or 7.3 percent, to $1.8 billion.

Gross margin contracted slightly from 16.7 percent in Q2 2012 to 16.4 percent in Q2 2013.

The quarter also featured Hormel paying its 339th consecutive quarterly dividend on May 15, at the annual rate of $.68.

“We were pleased to deliver sales and volume growth, despite harvest reductions in both our Refrigerated Foods and Jennie-O Turkey Store operations,” said Jeffrey Ettinger, chairman, president and chief executive at Hormel. “Overall, earnings per share of $0.46 during the quarter keep us on track to maintain our full year guidance,” he added.

Hormel sees full-year earnings in the range of $1.93 to $2.03 per share. The outlook is in line with analyst calls for EPS of $1.99.

Shares of HRL are up 37 percent so far in 2013 through Wednesday’s close at $42.40.