US food manufacturer Diamond Food has increased its full-year sales and profit guidance on the back of a strong second quarter.
The Kettle Chips and Emerald Snacks manufacturer yesterday (8 March) increased its sales forecast to between US$925-950m for the year, compared to $920-945m previously. It also said it is increasing its non-GAAP earnings per share guidance by $0.02 to a range of $2.45-2.51.
For the quarter ended 31 January, the manufacturer saw net income more than double to reach $19.7m against $8.8m in the same quarter of the previous year.
Net sales for the quarter were up 40% to $257.6m, while retail sales were up 63% to $215.6m, which it attributed to “significant snack revenue growth due to the addition of Kettle and strong organic snack sales”.
However, the company recorded a 19% decline in non-retail sales as a result of the USDA school lunch programme not being offered this year.
The company said that shelf space for Kettle Brand potato chips doubled in 1,000 mass merchandise stores and increased significantly in several grocery retailers, “while Kettle Brand Tias! Distribution continued to expand during the quarter in the natural, mass and club channels”.
For the half, net income was up 42.9% to $33.9m, while net sales rose 39% to $364.8m.
“We achieved double-digit organic sales growth in our snack portfolio due to securing key new distribution in the club, mass and drug channels,” said chairman, president and CEO Michael Mendes. “To support these new distribution gains, we plan to increase our advertising investment during the remainder of the year, which we believe will position our portfolio for continued growth in the future.”
Shares in the manufacturer were down 1.22% at the market’s close yesterday to $51.01 a share.
Click here for Diamond Foods’ full earnings statement.
