US snack maker Diamond Foods said it hopes to double the size of its business in the next five years as it upped its earnings guidance for the fiscal 2010 year.

Speaking as Diamond published its annual results, CEO Michael Mendes told analysts yesterday (30 September) that the company's strategy is to drive profitable, sustainable growth, as it leverages its brands, including Pop Secret, which it bought from General Mills last year.

"Over the next five years we believe this business is capable of generating US$1bn in total sales, snack sales of over $500m dollars and earnings of over $3.50 per share. In order to meet these targets we will seek to drive strong organic growth, while exploring acquisition opportunities that can enable or accelerate our ability to deliver and sustain long-term shareholder value.

He added: "We want to focus on categories where we can achieve scale on the retail shelf and deliver exceptional value to the retailers and consumers alike and introduce innovate new products and packaging that will provide the foundation for dynamic organic growth," Mendes said.

Diamond also yesterday increased its earnings guidance by 18 - 25% over fiscal 2009.

Net profit for the twelve months ended 31 July reached US$45.8m from $23.9m in the previous year. Net sales grew 7% to $570.9m compared to $531.5m for the prior year.

Mendes told analysts that company felt "very good" about EPS growth next year, while investing and putting itself in a position for long-term earnings growth.

He added that an acquisition could be "a much more cost effective way of targeting channels it would more effectively like to service".

"We are in a very different marketplace today than we were three or four years ago," Mendes said. "If assets were to become available and they were to reflect more of the multiples we anticipate we might see next year, that could be an interesting choice for us. If that's the case, we want to be prepared to pursue those.

He added: "I can give you a list of 100 interesting brands that would make us a better company, but each one is unique. If it is going to improve shareholder value and help our other brands further distribute…We want to stay open to what may happen."

Mendes told analysts that its Pop Secret brand, acquired in Diamond's fiscal first quarter, would be "highest" on its list as an opportunity to expand on. He also talked about the possibility of an acquisition in a channel the company doesn't currently have access to.

However, he added: "We don't see a lot of opportunities that fit within those filters, but it's something we are constantly evaluating."