Infant nutrition group Mead Johnson has lowered its full-year sales and earnings outlook despite noting progress has been made on lifting its sales trajectory in China.
Reporting its third-quarter results, Mead Johnson said it now anticipates full-year net sales of 6% to 7% below the prior year on a reported basis and 2% to 3% below the prior year on a constant dollar basis. The company also revised its forecast for annual earnings per share to $2.80 to $2.87 due to lower sales.
“We are operating in a challenging global environment and it is now clear that our growth will occur more slowly than we had planned. In this environment, we have chosen to revise our full-year guidance for both top and bottom line numbers,” CEO Kasper Jakobsen said.
However, Jakobsen noted: “We continue to make progress against our global plan. Most critically, we have made substantial progress in China.”
The company, which has seen revenue in China hit by regulatory changes and a rapid channel shift, said it has gained momentum behind new products in the country, where sales have stabilised.
Total net sales were 4% lower than last year falling to US$937.5m. However, the decrease was due to currency exchange. Revenue was in-line with last year on a constant-dollar basis.
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Lower sales did impact the company’s EBIT. Operating profit fell to $228.2m versus $239.2m despite a slight improvement in operating margin, which increased to 24% of sales up from 23%.
Net earnings in the three months to 30 September totalled $148.6m compared to $154.6m.