Del Monte sustains $27.6 million loss in quarter
Sept. 9, 2011
SAN FRANCISCO — Lower unit volume, higher costs and expenses related to a merger contributed to Del Monte Corp. posting a loss during the first quarter. An investor group led by funds affiliated with Kohlberg Kravis Roberts & Co. L.P., Vestar Capital Partners and Centerview Capital, L.P. acquired Del Monte Foods on March 8.
For the quarter ended July 31, the company suffered a loss of $27.6 million, which compared with income of $59.4 million during the same quarter of the previous year. Sales for the quarter were $776.2 million, down 4% from $804.6 million during the same quarter of the previous year.
“Despite the challenging first-quarter results, my initial assessment of the company is that our portfolio of brands is strong and well-positioned in on-trend categories,” said Dave West, chief executive officer. “While we took pricing actions to mitigate input cost inflation, the historical lag of price realization was exacerbated by the heavy competitive promotional activity in the quarter. In the short term, we expect the marketplace will continue to reflect high input cost inflation, a challenging consumer sentiment, a price-seeking consumer and heightened manufacturer promotional activity. Longer term, we expect to benefit as we neutralize input cost inflation with price realization and productivity savings as well as through the benefit of new product introductions. While current challenges exist, we are focused on the long-term health and growth of the company by continuing to invest in marketing and innovation. Del Monte has a solid foundation on which to grow, and I look forward to being a part of Del Monte’s next stage of growth.”