US food distributor Performance Food has said that it expects earnings for the fourth quarter of 2003 to be lower than previously forecast, mainly due to higher raw product costs.
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The company said it now expects fourth-quarter earnings to be in the range of 24 cents to 26 cents per share. This compares to the company’s October guidance of between 40 cents and 45 cents per share.
“We remain committed to steps we previously outlined to manage the volatility in the cost of raw product in our fresh-cut division. We will continue to review our supply policies and other steps we can take to reduce our exposure in this area. In addition, the measures we have underway to increase the operational efficiency of our fresh-cut division in 2004 are expected to alleviate some of that division’s margin pressures,” said CEO Michael Gray.
“While 2003 represented an unprecedented year in terms of raw product issues, given the extent of the impact of the volatility of raw product costs on our operating margins, we will assess the continuing impact of these factors on our expected results for 2004.”
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