Dive Brief:
- Dean Foods Company reported a net loss of $9.8 million, down from $39.2 million in the first quarter a year ago, according to the company's Q1 earnings report.
- The company saw $28 million of net cash from operating activities and $19 million of free cash flow, resulting in its 10th-consecutive quarter of positive free cash flow. Net sales for the quarter increased to $2 billion — topping expectations of $1.97 billion —up from last year’s $1.88 billion.
- "As we look to the second quarter and the balance of 2017, we remain focused on executing our commercial and cost productivity initiatives," said Ralph Scozzafava, Dean Foods' chief executive. "We believe our new product innovation, strategic partnerships, and focus on eliminating waste in our supply chain are key enablers to deliver sustainable long-term growth and financial results."
Dive Insight:
The company’s results were less than expected on Wall Street and its $9.8 net loss is somewhat troublesome, but the dairy distributor appears to headed in the right direction.
Scozzafava said he’s hopeful about Dean Foods’ commercial and cost productivity initiatives, which includes its DairyPure sour cream launched in March that has a clean label, consumer-preferred product and packaging and fresh cream from the company's local dairies. The strategy also includes expanding its footprint of the company’s super-regional ice cream brands.
And it’s not looking outside its core products as well. Just this week, Dean Foods acquired a minority stake in Good Karma Foods, which makes non-dairy milk and yogurt, in an effort to add a different way of thinking to the company. With milk sales dropping, branching out to milk alternatives seems like a savvy move.
While the company continues to show net debt—this quarter recording $868 million, it has seen three-straight quarters of net debt reduction since its acquisition of Friendly’s. Dean Foods appears to be thoughtfully positioning the company for future growth by improving its balance sheet and rolling-out more pure and plant-based products to meet consumer demand.