Del Monte Foods, the US food group set to be bought by three private-equity firms for US$5.3bn, has cut its full-year revenue target after sales slid in its second quarter.
The canned produce and pet food firm, which last week agreed to a takeover bid from KKR, Vestar Capital Partners and Centerview Partners, said today (2 December) that its annual sales could fall by 1% after it posted a 1.9% drop in the quarter to the end of October.
Del Monte set a range of a 1% fall to a 1% increase in annual sales, excluding the impact of the potential KKR-led takeover, against its previous target of growth of 1-3%. The food group, however, kept its target for diluted earnings per share from continuing operations to reach $1.38-1.42.
In the second quarter to 31 October, Del Monte’s net sales fell 1.9% to $940.9m, driven by a 5.4% fall in sales from its consumer products business.
Net income, however, stood at $81.1m, compared to $62.6m a year earlier. Operating income rose 5.3% to $148m.
During the first half, the company saw net sales decline 1.5% to US1.74bn, driven by a 5.7% drop in sales in its consumer products division.
Net income however, reached $140.5m against $121.2m in the same half of the previous year.
Shares in the company had risen 0.16% at 9:30ET to US$18.76 a share.
Click here for Del Monte Foods’ full earnings release.