|A diverse product portfolio, with strength in Silk and Earthbound Farm brands, drove growth during the quarter.|
DENVER – WhiteWave Foods’ diverse product portfolio appears to be hitting on all cylinders. Both of the company’s North America and European business segments, which include the manufacturing and marketing of plant-based beverages, dairy creamers, organic greens and produce, and organic dairy products, had a positive operating income during the third quarter of fiscal 2014.
“We reported another quarter of strong financial results, with record net sales and strong operating performance leading to further earnings growth,” said Gregg Engles, chairman and chief executive officer. “Our organic net sales growth of 12% in the third quarter is the highest rate we achieved this year. Impressive results by our market-leading brands in North America and Europe powered another strong quarter as consumers across continents are increasingly looking for great-tasting, healthy and responsibly produced foods and beverages.”
Net income for the quarter ended Sept. 30 was $40,857,000, equal to 23c per share on the common stock and an increase compared to the previous third quarter when net income was $24,293,000, equal to 14c per share.
Sales for the quarter rose significantly to $857,467,000 compared with $638,518,000 in the previous year’s quarter. The spike in sales was due to the inclusion of Earthbound Farm, which was acquired earlier in the year.
“We exited Q3 with strong momentum across our brands and a solid balance sheet with significant liquidity to support our continued growth initiatives,” Mr. Engles said Nov. 10 in a conference call with financial analysts.
The company said its sales in the North America business segment increased 36% with 10% organic growth in the quarter behind the continued strength of plant-based beverages, coffee creamers and premium dairy platforms.
“We are pleased with the strong growth we continued to experience in Silk Almond milk with sales up 30% in Q3 after almost five years in the market and off an already sizable base,” Mr. Engles said. “As expected with the strong growth this category has seen for the past several years, private label almond beverages are increasing.
“We anticipate that private label's share of the category will stabilize at levels similar to other food categories. We also expect the category will continue to expand fueling Silk's growth in the years to come.”
WhiteWave’s European business, which primarily features plant-based foods and beverages, saw its sales rise 21% on a constant currency basis. Categories that led the way in Europe include almond beverages, soy beverages, dairy-free yogurts and cooking creams.
“We believe plant-based foods and beverages are in the early stages of broad consumer acceptance and growth with the potential to be adopted in markets around the globe,” Mr. Engles said. “We view this as a vast opportunity for future growth with the ability to drive material increases in shareholder value.”
Mr. Engles said the company’s Horizon Organic dairy brand is performing well, but that its growth will be slowed in the third quarter due to organic milk supply issues.
“With this strong demand and rising input cost for organic milk, we are implementing another price increase at retail in mid-November to aid in offsetting additional pay price increases we are providing to our family farmers,” he said.
In the question-and-answer period with the analysts, Mr. Engles added that out of stocks will occur at higher levels in the fourth quarter as the entire organic dairy category deals with tight supply issues.
For the first nine months of fiscal 2014, WhiteWave’s net income rose to $107,624,000, equal to 62c per share, from $79,501,000, equal to 46c per share, the previous year.Sales for the period were $2,525,617,000 compared with $1,823,854,000 during the first nine months of 2013.