HJ Heinz today (30 November) posted strong second quarter operating income growth, which was up 10% year-on-year, driven by the performance of Heinz’s top brands and products.
Sales rose by 3.5%, as the ketchup maker’s investment in its brands saw sales of Heinz branded products increase by 9%, while sales of Weight Watchers Smart Ones meals increased 17%, Classico pasta sauces grew 9%, TGI Friday’s frozen snacks were up 12%, Plasmon baby food increased by 7% and Weight Watchers meals sales rose 11%.
On a total company basis, including the impact of discontinued operations, the company reported net income of US$191.6m, or $0.57 per share, in the current quarter compared to $203.8m, or $0.60 per share, excluding discontinued operations and special items in the prior year. On a continuing operations basis, Heinz posted income of $197.4m or $0.59 per share compared to $168.3m or $0.49 per share in the prior year. Excluding discontinued operations,income was $197.4m in the current quarter or $0.59 per diluted share, compared to $205.4m or $0.60 per share.
“The Heinz sales and profit results in second quarter were outstanding while net income was impacted by the significantly higher tax rate in the quarter,” Michael Mullen, Heinz spokesperson, told just-food.
The tax rate for the quarter was 34.8% compared to 23.8% a year ago, excluding special items.
Commenting on the company’s performance, Heinz’s chairman, president and CEO William R. Johnson said: “We are pleased by the excellent operating results in the quarter. Sales of our top ten brands grew by 8% and total Heinz operating income for the quarter increased 10%. North American Consumer Products continued its strong momentum with sales up 7.5% and operating income up 12.5%. Our businesses in Europe are building momentum and generated 9.7% operating income growth in the quarter.”
Based on its strong performance, Heinz has increased its earnings per share guidance. “As a result of its strong business momentum, Heinz has raised its full year earnings per share outlook from $2.35 per share to a range of $2.35 to $2.39 per share,” Mullen, told just-food.