US ketchup giant Heinz has posted a 5.7% drop in third-quarter earnings, despite an strong sales performance, following the sale of two businesses.
For the quarter ended 27 January, Heinz reported a profit of US$228.5m, down from $242.3m last year.
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However, excluding two businesses the company sold – a frozen hors d’oeuvres business in the US and a private-label frozen desserts unit in the UK – earnings from continuing operations rose 9%, with EPS rising from $0.76 to $0.83 a share.
Reported sales grew almost 13% to $2.68bn, boosted by a 41% increase in marketing investments.
The company has also implemented a series of cost cutting initiatives, which resulted in an improvement of gross margin, which rose to 37.5% from 35.7%.
“Our excellent third-quarter performance reflects strong execution of our strategy to accelerate growth in emerging markets and increase consumer marketing and innovation to drive volume growth in key developed markets especially the UK and US retail businesses,” said chairman and chief executive William Johnson.
Click here for the full earnings release from Heinz and click here for more on the company’s plans for promotions in the UK and the US.
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