Del Monte Foods sustains loss in quarter
August 28, 2008
by FoodBusinessNews.net Staff
SAN FRANCISCO — As the result of inflationary cost pressures, Del Monte Foods Co. sustained a loss of $10.1 million in the first quarter. The loss compared with income of $3.5 million during the same quarter of the previous year.
Sales for the quarter were $726.2 million, up 16% from $626.8 million during the same quarter of the previous year.
"Our businesses continue to be negatively impacted by inflationary cost pressures that further accelerated during the first quarter," said Richard G. Wolford, chairman and chief executive officer. "While additional pricing actions were implemented, our margins for the quarter, as expected, reflected cost increases in advance of our pricing actions. Combating cost increases through pricing actions and productivity gains remain a critical priority, and we believe we are on track to offset costs in the back half of fiscal 2009."
In the quarter the Consumer Products segment had an operating income of $9.8 million, down 3% from $9.5 million during the same quarter of the previous year. Sales in the segment were $383.5 million, down 21% from $317.9 million during the same quarter of the previous year.
For fiscal 2009 the company expects net sales growth of 6% to 8% from 2008 net sales. The company also expects earnings per share from continuing operations to be toward the lower end of the 58c to 62c range.
"Our team is aggressively focused on our accelerated growth strategy to both unleash the power of our core brands and drive our Pet and Packaged Produce growth engines," Mr. Wolford said. "These are core initiatives for our future performance which we believe will combine with our pricing and productivity actions to achieve long-term sustainable e.p.s. growth."