US chewing gum giant Wm Wrigley has posted a 28% increase in first quarter profits, boosted by a strong performance from its European and Asian businesses.
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“Our results this quarter reflect solid execution in the marketplace, including the launch of several new products and strong support of our brands around the world,” said president and CEO Bill Perez in a statement released today (30 April). “We anticipate maintaining our positive momentum through focused investment in our key geographies and upcoming product launches, such as the gum brand ‘5’ in the US marketplace.”
Total revenues rose 17% to US$1.26bn. Revenue in Europe, the Middle East and Africa, Wrigley’s largest region, climbed to $564.7m. Sales in Asia rose to $217m while US sales increased by only 3.3% to $414m. Sales were up 27% in Europe and 23% in Asia.
Net income increased to $142.7m, or $0.52 a share, from $111.9m, or $0.40 cents for the comparable period of last year.
Consolidated gross margins for the first quarter were 51.8%, marginally lower than 51.9% for the same quarter of last year.
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By GlobalData“Given today’s more challenging cost and competitive environment, we are satisfied with the improvements in gross margin versus the previous quarter and with our ability to essentially hold steady versus a year ago,” said Senior Vice President and Chief Financial Officer Reuben Gamoran. “As noted at our Annual Meeting, our now concluding supply chain restructuring program will yield approximately $20m in savings during 2007 that will help us manage against any additional margin pressures as the year progresses.”
Last month, the company announced plans to increase US prices by 10% in the second and third quarters to counter rising commodity costs for corn syrup.
Wrigley shares had increased 7.85% to $59.37 as just-food went to press.
