Del Monte Foods reported a 47% drop in second quarter profits yesterday (30 November) as margins came under pressure by higher costs for fish, peaches and tomatoes. Expenses for integrating acquisitions also dented profits, the company revealed.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
Del Monte posted a profit of US$23.2m, or $0.11 a share, for the quarter ended 29 October, down from $43.9m, or $0.22 cents a share, a year earlier.
Despite this, earnings excluding one-off costs such as integration expenses beat expectations. Excluding exceptional items earnings totalled $0.18 cents a share, unchanged from a year earlier.
Sales rose 12.6% to $893.5m. Based on the first half performance, the company said it now expects sales to increase 12-15% in the year as a whole. Previously the company had forecast sales growth of 14-16%.
Consumer product sales fell 3.1%, as higher prices across the tuna category reduced the amount of tuna sold.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData“This quarter’s results were driven by strong performance in our acquired pet businesses, continued brand-driven pricing actions, new product introductions, and aggressive cost-reduction programs in the face of ongoing exogenous cost pressures,” said Richard G. Wolford, chairman and CEO of Del Monte Foods. “Our Consumer Products business was adversely impacted this quarter by increased costs and pricing-related reduced volume in lower margin products.”
Del Monte said that it still expects earnings from continuing operations of $0.48-$0.53 a share for the fiscal year.
Del Monte shares rose from an opening value of $11.29 yesterday to close at $11.29.
