Kerry Group, the Ireland-based food maker, has stuck to its earnings targets after seeing restructuring initiatives offset falling sales to boost margins.

The company behind brands including Wall’s sausages and Mattessons Fridge Raiders snacks said it was “confident” it could meet an earlier forecast of EUR1.60-1.65 a share.

Chief executive Stan McCarthy said yesterday (12 May) Kerry’s like-for-like sales were down 3.5% during the first four months of its current fiscal year.

However, McCarthy said “restructuring and efficiency programmes” had led to a trading profit margin increase of 40 basis points and the business “trading ahead of target at EBIT level”.

Kerry said the downturn had hit volumes and sales at its consumer foods business. Volumes were down 3% during the first four months of the year; like-for-like sales dropped 8%.

“This reflects a 3% adverse impact due to pricing and a 2% negative impact on revenue due to the sterling/euro exchange rate depreciation in respect of exports from Ireland to the UK market,” Kerry said. “Nevertheless Kerry Foods’ core brands performed well particularly in the UK market.”

Kerry’s restructuring moves, however, have boosted trading profit margins at the consumer foods business by 30 basis points.

The company said its ingredients and flavours volumes had “increased slightly”, although sales were down 2% on a like-for-like basis.

“Revenues were adversely impacted by the downturn in primary ingredients, in particular dairy and fruit preparations,” Kerry said.

The division’s trading profit margins rose 50 basis points, the company added.