Under-pressure US dairy group Dean Foods is to close a processing plant in Virginia as part of moves to “consolidate” production.
Dean Foods, which last week saw its shares slide after issuing a profit warning, announced production at the PET milk processing facility in Richmond would be “phased out over the next few months”. Around 75 jobs will be axed, the company said.
“We will continue to maintain significant operations in High Point, North Carolina and Winston-Salem, North Carolina and our products will continue to be available in the region,” Dean Foods said.
“We regret the impact that this result will have on our employees and our community. The decision to eliminate jobs in any part of our business is never an easy one. This move does not reflect the quality of work performed by our employees but rather reflects the need to remove redundancy in our operations.”
On Tuesday, Dean Foods reported second-quarter numbers that missed analyst forecasts and cut its forecast for full-year, adjusted earnings per share.
Dean Foods posted higher second-quarter and first-half net sales but the growth it saw on its top line during the quarter was below Wall Street estimates. The company also saw its profits fall over both periods, with its adjusted, second-quarter earnings per share lower than analyst estimates.
CEO Ralph Scozzafava said Dean Foods’ “financial results came in well below our expectations”. He admitted: “We are not satisfied with our performance and are determined to improve our execution.”