US food group Heinz has reported a 5.8% rise in first-quarter net income to US$205.3m, on sales up 9.1% at $2.25bn.

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The company raised its full-year EPS outlook to towards the top of its previously annouced guidance range of $2.54 to $2.60, as first-quarter EPS rose by 8.6% to $0.63.


Heinz attributed strong organic sales growth of 5.3% to double-digit growth in ketchup, beans, soups, and the Smart Ones meals range. Marketing spend was 25% up in the first quarter, the company said. Heinz also reported that sales of its 15 biggest brands grew by 11% in the first quarter.


Operating income increased by 14.7% to $366.7m, reflecting “dynamic sales growth, productivity improvements, and very strong performance of the European and Asia/Pacific businesses”.


Heinz chairman, president and CEO William R. Johnson said: “Heinz continues to post strong sales and earnings and as a result of the outstanding first quarter, Heinz has increased its full-year EPS outlook to be near the top of the previously announced range of $2.54 to $2.60. The outstanding performance of Heinz beans, soups, Smart Ones meals and Classico sauces reflects our significant investment in healthier and more convenient products.”

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Johnson added that he was particularly pleased with the continuing momentum at Heinz’ US Consumer Products business, the “terrific” results from Asia Pacific and the accelerating turnaround in Europe. “Our first-quarter performance was outstanding considering a higher tax rate in the quarter and rising raw material prices, partially offset by favourable foreign exchange,” he said.


Heinz is not alone among major food companies in experiencing rising raw material costs, particularly in dairy ingrededients. The company said that commodity costs in the first quarter rose by 4.7%, reflecting higher costs for dairy, sweeteners and oils. Heinz said it had responded to rising commodity costs with price increases on average of 2.8% in the quarter and continued strong productivity gains.