Del Monte Net Boosted by Pet Products Demand

10-Dec-2012 --- Del Monte Foods today reported net sales in the second quarter fiscal 2013 of $1,009.7 million compared to $994.3 million in the second quarter fiscal 2012, an increase of 1.5%.

10 Dec 2012 --- Del Monte Foods has reported net sales in the second quarter fiscal 2013 of $1,009.7 million compared to $994.3 million in the second quarter fiscal 2012, an increase of 1.5%. Pet new product volumes and list pricing actions net of trade spend drove the increase. Existing product declines in both Pet and Consumer partially offset the increase.

Operating income declined 1.8% from $107.1 million in the prior year period to $105.2 million. The decrease was primarily driven by increased marketing and operating costs. This was partially offset by list pricing actions net of trade spend and lower G&A.
 
Adjusted EBITDA increased 1.1% to $160.7 million compared to $158.9 million in the prior year period. The drivers of Adjusted EBITDA were similar to those of operating income noted above. In addition, the cash impact of hedging activity drove the increase in Adjusted EBITDA. Gains and losses on economic hedging positions are recorded as other (income) expense. For cash flow hedges, the effective portion of gains and losses is deferred in equity and recognized as part of cost of products sold in the appropriate period. The cash impact of all hedging activities is reflected in Corporate Adjusted EBITDA. In calculating Adjusted EBITDA, the adjustment for cash benefits from economic hedge positions is calculated pursuant to the Company's 7.625% Notes Indenture and credit agreements.
 
The Company remains committed to long-term brand building in both Pet and Consumer, said Dave West, CEO of Del Monte Foods. In November, the Company launched a national integrated marketing campaign to support the iconic Del Monte brand, highlighting the brands vitality and nutritional appeal. Also, we continue to support new Pet Products such as Meow Mix Tender Centers, Pup-Peroni Mix-Stix, and Milo's Kitchen Chicken Grillers Chicken Recipe through increased marketing investment.
 
Pet Products net sales were $497.0 million, an increase of 5.8% from net sales of $469.6 million in the prior year period. The increase in Pet Products net sales was driven by new product volume growth, primarily in dry cat food and pet snacks. List pricing actions net of trade spend also positively contributed to net sales.
 
Pet Products operating income increased 3.4% from $79.5 million in the second quarter fiscal 2012 to $82.2 million in the second quarter fiscal 2013. The increase was primarily due to list pricing actions net of trade spend partially offset by higher marketing and operating costs. Pet Products Adjusted EBITDA declined from $100.5 million in the second quarter fiscal 2012 to $99.9 million in the second quarter fiscal 2013, or 0.6%.
 
Consumer Products net sales were $512.7 million, a decline of 2.3% from net sales of $524.7 million in the prior year period. The decline in Consumer Products net sales was driven by unit volume declines in existing products (retail Tomato) due to a planned shift in promotional activities and category softness.
 
Consumer Products operating income declined 18.0% from $51.6 million in the second quarter fiscal 2012 to $42.3 million in the second quarter fiscal 2013. The decline was primarily driven by the negative impact of the topline and higher marketing costs to support the Del Monte brand revitalization.

Related Articles

Food Ingredients News

FrieslandCampina Kievit switch to sustainable certified palm oil

10 Nov 2017 --- The sustainable palm oil drive within the food industry is being stepped up at FrieslandCampina Kievit which is upgrading its Vana-Monte portfolio to RSPO SG – using palm oil that is segregated from conventional palm oil and certified as sustainable by the Roundtable on Sustainable Palm Oil (RSPO).

Business News

Danone reports accelerated sales growth in Q3, driven by demand for infant formula in China

17 Oct 2017 --- The world’s largest yogurt maker, Danone, has reported better-than-expected Q3 sales results with a 4.7 percent increase, driven by the demand for infant formula and water products specifically in China. The performance came above the company-compiled average of analyst estimates for 2.8 percent growth in group sales. The dairy business improved in the US, where the integration of its acquisition of WhiteWave remained on track. The company also reiterated its full-year guidance. 

Food Ingredients News

Nestle gets Dow Jones sustainability nod

11 Sep 2017 --- Swiss transnational Nestlé has topped the sustainability category in a Dow Jones Sustainability Index that measures the performance of the largest global companies, rating them on economic, environmental and social impacts. 

Business News

Bury the Hatchet and Team Up - DMPL and Fresh Del Monte Produce in Joint Ventures

28 Jun 2017 --- Del Monte Pacific Limited and Fresh Del Monte Produce Inc have put their differences and litigation to one side and are now joining forces.

Food Ingredients News

Coca-Cola Expands Ready-To-Drink Beverage Portfolio

29 Mar 2017 --- The Coca-Cola Company, together with its bottlers in Latin America, have announced the closing of the acquisition of Unilever’s AdeS plant-based beverage business. The Coca-Cola Company is now the sole owner of the AdeS brand.

More Articles