Branded salad trends hurt Chiquita results
November 3, 2010
CINCINNATI — Weak pricing in Europe along with decreased demand for salads caused Chiquita Brands International, Inc. to post a loss for the third quarter.
For the quarter ended Sept. 30, the company had a loss of $8 million, which compared with income of $5 million during the same quarter of the previous year. Sales for the quarter were $730 million, down 8% from $797 million during the third quarter of fiscal 2009.
“While our third-quarter results are mostly in line with our expectations, we are disappointed by recent trends in local European pricing,” said Fernando Aguirre, chairman and chief executive officer. “Although we continue to make progress in executing our business improvement plans in Europe and realized better local pricing year-on-year, market pricing began to soften late in the quarter due to excessive imports from E.U. and ACP sources. In the salads business, volumes were lower than we expected, reflecting retailers’ conversion to private label and generally soft category demand.
“This has been one of the most challenging operating environments in Europe. Notwithstanding the recent strengthening of the euro, if market conditions do not improve in the near term, our full-year comparable income is expected to be lower than previously estimated. Despite the weak economic environment, we believe our market leadership, operating efficiencies and breakthrough innovations such as the FreshRinse food safety and freshness technology will enable us to strengthen our business. We continue to focus on enhancing our business to deliver growth and diversification of earnings in 2011 and beyond.”
During the quarter the bananas segment had an operating income of $3 million, down 88% from $22 million during the same quarter of the previous year. The segment had sales of $431 million, down 9% from $472 million during the same quarter of the previous year.
The Salads and Healthy Snacks segment had an operating income of $18 million, down 27% from $24 million during the same quarter of the previous year. Sales in the segment were $251 million, down 13% from $289 million.
For the nine months ended Sept. 30, the company as a whole posted income of $77 million, down 34% from $117 million during the same period of the previous year. Sales for the nine months were $2,454 million, down 5% from $2,591 million during the same period of the previous year.