US: Annie's lowers outlook as 9M sales, earnings climb
Annie's cuts forecasts
US organic food group Annie's has lowered its forecast for annual profits, despite booking an increase in sales and earnings for the first nine months of its fiscal year.
Net income in the nine months to 31 December rose to US$10.4m, up 41%, the group revealed yesterday (10 January). Operating income increased 43% to $17.6m.
Gains were driven by an improved gross margin trend, which strengthened quarter-on-quarter, the company said. Higher brand investment led to a jump in consumption, Annie's added. Sales in the nine months rose from $117,3m to $143.9m.
However, the company lowered its full-year earnings outlook. The group forecast adjusted EBITDA of $29-30m, down from previous guidance of $31m, and cut EPS estimates to a range of $0.91-93, down from the "lower end" of $0.97-1.01.
Shares in Annie's fell yesterday from an open of $42.15 to close at $41.83.
Nevertheless, CEO John Foraker was upbeat on Annie's prospects. "Our authentic and trusted brand, the additions we are making to our team and our deep innovation pipeline position us well for fiscal 2015 and beyond," he insisted.
Janney Montgomery Scott analyst Jonathan Feeney concurred that the group's long-term prospects remain strong, despite short-term drag factors.
"Earnings missed and full-year guidance was lowered due to organic wheat inflation, expense growth, and delayed productivity. While we still have our concerns about non-core category and channel expansion, new competitive entrants in mac ‘n cheese, and deferred brand and capital investments, the potential growth opportunity remains compelling."
|Annie's Reports Third Quarter Fiscal 2014 Financial Results|
nnie's, Inc. (NYSE: BNNY), a leading natural and organic food company, today announced financial results for its third quarter of fiscal 2014, ended December 31, 2013.
"Our results reflected continued top-line strength and accelerating momentum in consumption, driven by growing brand awareness, expansion in our mainline distribution, and the success of our new products," commented John Foraker, CEO of Annie's. "Consumers continue to adopt natural and organic food into their lifestyles and are demanding greater transparency in food labeling, which are important and positive trends for us.
"Earnings in the quarter reflected an improved gross margin trend versus the second quarter, as well as significant investments in our brand and the expansion of our talent base to help us meet the needs of our rapidly growing business. We expect solid adjusted earnings per share growth in the fourth quarter, despite tight supply conditions in the organic wheat market, the timing of certain productivity projects and a later Easter holiday this year.
"Importantly, our authentic and trusted brand, the additions we are making to our team and our deep innovation pipeline position us well for fiscal 2015 and beyond," concluded Foraker.
Third Quarter Results
EBITDA for the quarter was $5.2 million, with adjusted EBITDA increasing 8.2% year-over-year to $5.6 million. Adjusted EBITDA growth was driven by strong net sales growth, partially offset by a lower adjusted gross margin percentage year-over-year, resulting from higher commodity costs and inventory obsolescence. Adjusted selling, general and administrative expenses improved slightly as a percentage of adjusted net sales, as investments in marketing and headcount growth were supported by leverage from the strong sales growth.
Net income for the quarter was $2.8 million, or $0.16 per diluted share, as compared to $1.4 million, or $0.08 per diluted share, in the third quarter of fiscal 2013. Adjusted net income was $2.9 million, or $0.17 per diluted share, as compared to adjusted net income of $2.7 million, or $0.15 per diluted share, in the third quarter of fiscal 2013.
Revised Fiscal 2014 Outlook
Original source: Annie's Inc
- just-food's pick: Innovation on show at ISM 2016
- Mondelez results and outlook - 7 things to learn
- Richelieu Foods CEO eyes growth - interview
- Foodservice focus: McDonald's/Five Guys/Starbucks
- Can dairy-free Flora lift Unilever spreads sales?
- Chobani targets growth after rejecting offers
- Mars to cut artificial colours from global foods
- Private-equity firm HKW acquires Panos Brands
- WWF launches food security platform
- Arla eyes job cuts as part of 2020 growth push