Marketing costs drag down Del Monte Foods

by Jeff Gelski
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SAN FRANCISCO — The top line’s negative impact and higher marketing costs to support a revitalization of the Del Monte brand primarily drove down adjusted EBITDA for the Consumer Products segment of Del Monte Foods, Inc. by 21% in the second quarter ended Oct. 28, the company said Dec. 7.

Adjusted EBITDA in Consumer Products fell to $56.1 million in the quarter, which compared with $70.7 million in the second quarter of the previous year. Second-quarter net sales in Consumer Products dropped 2% to $512.7 million from $524.7 million. Existing products (retail tomato) experienced unit volume declines because of a planned shift in promotional activities and category softness.

Companywide in the second quarter, Del Monte Foods’ adjusted EBITDA rose 1% to $160.7 million from $158.9 million in the previous year’s second quarter. Net sales increased 2% to $1,009.7 million from $994.3 million. The company’s Pet Products segment saw EBITDA decline to $99.9 million in the second quarter from $100.5 million, but segment net sales rose 6% to $497 million from $469.6 million.

For the six months ended Oct. 28, Del Monte Foods companywide had adjusted EBITDA of $274.3 million, up 6% from $260.1 million in the same time period of the previous year, and net sales of $1,830.8 million, up 3% from $1,770.5 million.

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