US snack maker Diamond Foods is increasing prices as it tackles pressure from walnut costs.
The company, which has endured a tumultuous six months that included an accounting scandal that led to the exit of its CEO and the derailment of its plan to buy Pringles, today (13 March) provided a business update to the market.
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Diamond said key brands were gaining market share but noted that walnut prices were at “record” levels, which meant it was looking to increase the prices of its products.
Global demand for walnuts meant prices were 35% higher than for last year’s crop, Diamond said. It said it expects its walnut costs to increase in line with market prices and added: “Diamond is taking pricing action to address this cost issue.”
The company plans to provide a more detailed outlook for the year when it restates its financial accounts for 2010 and 2011. No date for the refiling of the numbers was provided.
The improper accounting of payments to walnut growers, which was revealed last month and led to the exit of Diamond’s CEO and CFO, has meant the company will have to restate its financial results for the last two years.
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By GlobalDataMeanwhile, Diamond has appointed financial advisors from Dean Bradley Osborne Partners to help it assess its capital structure and look at ways to strengthen its balance sheet.
“Diamond’s team has taken a number of actions to address the issues facing the Company and to better position Diamond for the opportunities we see going forward,” interim president and CEO Rick Wolford said. “The company, working with Interim CFO Mike Murphy and his team from Alix Partners, is progressing well in working with our banks and addressing financial reporting and restatement issues.”
Wolford added: “With regard to its core business, Diamond’s management team is sharply focused on optimising the strategy, performance and execution of each of its product lines.”
Diamond cited Nielsen data that showed the market share of its Emerald, Pop Secret and Kettle brands increased for the 12 weeks to 18 February. However, the market share of its Diamond of California brand fell by 30 basis points.
