Dean Foods has seen its net sales and net income shrink in the third quarter of the year as it incurred incremental costs partly ‘due to the hurricanes in both Florida and Texas’.
In the three months to September 30, net sales were $1.94 billion, representing a 1.37% decrease on the same period of 2016.
Meanwhile, net income shrank by 90.5%, from $14.5 million to $1.38 million. Total volume across all products was 608 million gallons, a 6.6% decline.
Dean Foods, the food manufacturer whose brands include Land O’Lakes, DairyPure and Friendly’s ice cream, has now lowered its earnings outlook for 2017.
The company has sought to diversify its portfolio this year with the acquisitions of non-dairy brands Uncle Matt’s and Good Karma.
Dean Foods CEO Ralph Scozzafava said the performance in the third quarter came in-line with the company’s expectations.
“We improved overall execution in the quarter despite incurring some incremental costs due to the hurricanes in both Florida and Texas as we continued to service our customers from sister plants,” he said.
“We continue to make strong progress against our cost savings initiatives and are in the early stages of a significant enterprise-wide cost productivity programme to secure incremental savings in 2018 and ongoing. Importantly, we have recently won some new business for 2018 behind solid sales execution through the quarter.”
He added: “Our initiatives to build strong brands and diversify our portfolio will build brand equity on DairyPure through new product innovation and enhanced consumer marketing. In addition, we are intensely focused on reducing our cost structure across each facet of the organisation.
“Through a comprehensive productivity program including OPEX 2020 and our enterprise-wide initiatives currently ramping up, we will drive efficiencies across the business to enable us to compete and win. Lastly, I want to emphasise that we are prudently navigating the macro environment in our industry with a solid strategy that will enable us to be successful.”
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