USA: International Multifoods warns on profits
Branded food manufacturer International Multifoods has said that its earnings for the year are likely to fall below Wall Street expectations, as the company's Pillsbury cake mix business was hit by aggressive promotions by competitors.
Chairman and chief executive Gary Costley said that the company would focus on cash flow rather than setting earnings targets, reported Reuters.
The company said it was vulnerable when General Mills decided to spend more on its Betty Crocker mixes to improve market share. Costley added that the company was not prepared when Aurora Foods' Duncan Hines also spent heavily on promotion in October.
"We did not see and did not have the kind of competitive intelligence that we probably needed in order to have that visibility in the market place," Costley was quoted by Reuters as saying. "We just didn't see it coming."
International Multifoods said it now expects earnings of between US$1.30 and $1.40 per share for the fiscal year ending in February, excluding items. Analysts had expected earnings of $1.71 per share.
The company also said it was considering ways to simplify its business structure and reduce costs.
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