March 5, 2021

Heinz Reports Strong Sales Growth, but Profit Slips

The H. J. Heinz Company reported on Tuesday that profit for its fiscal first quarter fell 6 percent as it closed factories and cut jobs. Excluding these cost-cutting measures, however, the results beat Wall Street estimates because of sales growth in emerging markets.

Officials said the company’s performance exceeded expectations because of strong growth in places like China and Brazil. Heinz, along with most food and beverage companies, has been working to improve efficiency as commodity costs rise and American consumers spend cautiously.

“We are off to a solid start to the year while continuing to adapt our strategies and tactics to meet the changing consumer dynamic,” Arthur B. Winkleblack, Heinz’s chief financial officer, told investors Tuesday.

Heinz said it was raising prices and making other efficiency improvements to offset rising costs for tomatoes and other commodities. In May, the company announced that it would cut jobs, close plants and raise prices to improve its bottom line. Heinz plans to cut up to 1,000 jobs globally in its 2012 fiscal year.

For its first fiscal quarter ending July 27, Heinz earned $226.1 million, or 70 cents a share, down from $240.4 million, or 75 cents a share, during the three-month period a year ago.

After adjusting for costs associated with four factory closures, job reductions and other productivity initiatives, the company earned 78 cents a share. That beat the 76 cents a share analysts were expecting, according to data from FactSet.

Revenue rose 15 percent to $2.85 billion, helped by sales growth in emerging markets and acquisitions. Wall Street had expected revenue of $2.79 billion.

Heinz, the world’s largest maker of ketchup, earned about 32 percent of its revenue during the quarter in the United States, while emerging markets made up 23 percent of all sales, up from 18 percent in the period a year ago. Heinz reaffirmed its earnings for the 2012 fiscal year of $3.24 to $3.32 a share, which excludes productivity initiative costs. Analysts expect earnings of $3.35 a share.

Shares of Heinz slipped 1.2 percent on Tuesday to $51.44.

Article source:

Speak Your Mind