US snackfoods specialist Diamond Foods has reported a 31% rise in earnings per share (EPS) for the second quarter to US$0.17 on sales of $133.8m, down 7% from $143.6m in the corresponding quarter last year.
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The company said quarterly sales had been hit by the earlier harvest which shifted sales to the first fiscal quarter. It added that sales had been in line with its guidance of $130m to $140m. For the six-month period, net sales rose by 2% to $318.3m, while first-half EPS reached $0.69, compared with $0.74 in the previous fiscal year, which included extraordinary gains of $0.14.
“Our business is on a trajectory to generate strong operating earnings growth for the fiscal year,” said president and CEO Michael J. Mendes. “This reflects the pricing power of our brands and allows us to more aggressively rationalise some of our less profitable items. We are taking a more measured approach to expanding distribution of our snack business to protect its long-term positioning.”
Culinary sales rose by 17% in the quarter, while snack sales fell by 8%. In addition to rationalising in favour of more profitable lines, Diamond said it had decided to spread its promotional activities more evenly throughout the year.
The company said its Emerald brand had increased its share of the snack nut market during the 12 weeks to 27 January by 10 basis points to 3.9%.
Diamond reaffirmed its full-year EPS guidance of $0.80 to $0.90, which would represent 50% growth over last year. The company is also forecasting North American retail sales of between 8% and 13% for the full year.
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By GlobalData
