Dive Brief:
- Pinnacle Foods' net sales surged 19.7% in the second quarter to $756.4 million, the company reported Thursday.
- The sales gains largely reflected the $123 million contribution of Boulder Brands, which Pinnacle acquired in January, and a 1.6% uptick in North America retail net sales.
- Pinnacle reported quarterly net income of $45.8 million, or 39 cents per share, up from $43.7 million last year. Adjusted earnings of 42 cents per share surpassed analysts' estimates.
Dive Insight:
Net sales for Birds Eye Frozen also grew 6.1%, which included higher volume/mix of 3.6% and increased net price realization of 2.5%. The company reported similar growth in this category for the past several quarters, which appears to buck the trend of sales declines that many other frozen food manufacturers have struggled with in recent years. The plant-based frozen foods brand Gardein has also been a contributor to this segment's success as the brand allows Pinnacle to align with the fast-growing plant-based products trend.
Boulder Brands has been Pinnacle's wider entrance into the better-for-you foods segment, but it could just be the start for the company's growth in this area. On an earnings call in February, the company outlined its plan to streamline the Boulder Brands portfolio and invest in faster growth for the remaining products. Additional acquisitions of natural and organic products could further expand this unit.
Growth in those segments is critical for Pinnacle as the Duncan Hines Grocery unit continues to decline. This quarter, net sales for the segment fell 2.7%, while net sales for the Specialty Foods segment declined 7.9%. Pinnacle has worked to turn things around for its grocery brands by aligning with ingredients and convenience trends, including the new Duncan Hines Perfect Size platform and new premium lines of Wish-Bone salad dressings, which debuted in March.