Companies across the food sphere report earnings this time of year, so Food Dive breaks down the latest earnings news all in one place.
Kraft sees profit slump, EPS rise
Kraft Foods Group posted its fourth consecutive quarterly profit dip Tuesday, falling 16% to $429 million, with weak demand for meals and desserts cited as part of the problem. Last year's Q1 saw $513 million.
However, the company beat Wall Street earnings per share predictions of 81 cents, reporting 86 cents. Revenue dropped only slightly, 0.2%, to $4.35 billion from $4.36 billion.
Kraft and H.J. Heinz Company announced last month the two companies would merge.
The coming Kraft-Heinz merger — expected for a second half of 2015 completion — greatly benefited Kraft shares, which shot up 51% the past year.
"We've stepped up our focus on execution, our pricing actions over the past year are coming through, and we're benefiting from a disciplined approach to marketing," said CEO John T. Cahill in a news release. "There is clearly more work ahead of us, but we will continue to build on this momentum to delight our consumers and customers, and prepare us for the next chapter ahead."
Considering what 3G did when it acquired Heinz, Kraft should be prepared for severe cost cuts once the merger officially takes place. This strategy will likely have its benefits as Heinz has seen, and growing consumer concerns might offer "healthier" options to the combined company's lineup.
Delhaize Belgian business sees trouble
Delhaize has run into trouble recently with its Belgian business due to strong competition and industrial action, and stores open for at least one year saw their sales drop 2.8% for the quarter. Delhaize CEO Franz Muller said that "profitability was impacted by investments in prices, promotions and marketing expenses," as the supermarket chain attempts to bounce back, reported European Supermarket Magazine. Delhaize saw better results in the U.S., however, where comparable same store sales increased 2.5%.
Mondelez earnings impress, revenue dips
Mondelez's earnings just about doubled in Q1 with upped prices, shares rising 3.3% before market trading. These numbers topped Wall Street estimates.
The company reported a 10.2% decline in net revenues due to currency fluctuations, while operating income fell 3.8%.
Mondelez also saw margin increases, with a 10.4% operating income margin, up 60 basis points this quarter, and a 13.8% adjusted operating income margin, an increase of 160 basis points.
With its first quarter results, Mondelez is maintaining its full-year 2015 outlook and 2016 margin targets. The expansion of the company's margins is credited to productivity and cost reduction efforts, which "enables continued investment in our Power Brands, supply chain, and sales and distribution capabilities to drive sustainable revenue and earnings growth," Irene Rosenfeld, Mondelez chairman and CEO, said in a statement.
These improved profit margins are crucial at a time when consumer spending is down, which is increasing the pressure to drive profits through cost-cutting measures. These measures include a plan to reinvent the company's supply chain to hit target profit goals.
Fresh Del Monte earnings tumble despite net sales boost
Fresh Del Monte reported unfavorable operating income for the first quarter, which was down from $65.2 million in Q1 2014 to $56.3 million this past quarter. Net income also dropped to $42.5 million from $58.6 million in last year's first quarter. Earnings dropped 27%.
These numbers are in spite of Fresh Del Monte's net sales, which reached $1 billion for the quarter, a growth of 2.7%.
Fresh Del Monte's positive net sales numbers were mainly due to increased net sales for bananas, which jumped 4% as volume grew by 6%, and other fresh produce markets, particularly in terms of high sales volumes in North America. However, the company's other financial figures were hurt by adverse weather conditions, which led to increased fruit procurement costs for bananas, quality problems for tomatoes and grapes, and lower yields for pineapples. Unfavorable year-over-year exchange rates didn't help either. However, Mohammad Abu-Ghazaleh, Fresh Del Monte chairman and CEO, is still "confident (Fresh Del Monte) will continue to deliver sustainable growth over the long-term," he said in a statement, according to Eurofruit.
Coming soon: Boston Beer Co. (4/29), Pilgrim's Pride (4/29), Bunge (4/30), Pinnacle Foods (4/30)