US ketchup giant HJ Heinz has seen a fall in reported operating income for the first nine months of its fiscal year as currency exchange weighed on the group’s results.
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Heinz revealed today (24 February) that reported income dropped 2.8% in the year to date. On a constant-currency basis, operating income rose by 3.7% in the first nine months of the fiscal year.
Net income rose 15%, climbing to US$748m, up from $651m in the previous year.
Organic sales growth of 6% and price increases of 7% offset a 1% decline in volumes during the nine months ended 28 January. Total sales rose 3% during the nine-month period.
Heinz said that pricing action was taken across the majority of its portfolio in order to offset increased commodity costs.
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By GlobalDataHowever, the decline in reported sales accelerated in the third quarter, when the unfavourable currency translation of 11.4% caused reported sales to fall 7.5%.
A fall in volume for the third quarter reflected the impact of overlapping price increases, a weak economic environment and the company’s decision not to match deep discounts in certain categories, Heinz said.
Diluted earnings per share were up 17% to $2.35 in the current year compared to $2.01 in the prior year, which also benefited from a 2% reduction in fully diluted shares outstanding.
Looking to the full year, Heinz reaffirmed its guidance of organic sales growth of 6% and EPS in the target range of $2.87-$2.91.
“Our business remains fundamentally sound with strong cash flow and a balanced portfolio of leading brands that deliver good value to consumers,” Heinz charman, president and CEO William Johnson said.
