Income from continuing operations was $58.9m, or $0.30 earnings per share from continuing operations (EPS), compared to ($8.0)m (loss), or ($0.04) EPS (loss) in the previous year.
“I’m extremely pleased with Del Monte’s results this quarter, which include strong double-digit, top-line growth, a significant improvement in margins, and record first-quarter earnings,” said Richard G Wolford, chairman and CEO of Del Monte Foods. “These results reflect the successful execution of our Accelerated Growth Plan strategy, including fiscal 2009 pricing actions that recouped some of the inflationary, cost-driven margin contraction experienced over the past few years, productivity initiatives to drive costs out of our business, and increased investment in our core brands and growth engines to drive margins and expand beyond our current categories.
“Our plan for fiscal 2010 and beyond reflects the strategy we initiated at the outset of fiscal 2009. We’re focused on building a stronger foundation and setting the stage for continued momentum. As a result of the strong first-quarter performance and the strategic progress we’re realising, we’re increasing our EPS and cash flow targets for fiscal 2010 and are increasing our long-term operating margin expectations. With the investment we’re making and have made in our company, our brands are stronger, competitiveness is heightened, and our team is focused.”
The 12.0% increase in net sales for the quarter reflects strong top-line growth driven primarily by the benefit of fiscal 2009 pricing actions, partially offset by the impact of volume elasticity, which was largely as anticipated. Solid base unit volume gains (primarily in Pet Products) and new product volume growth across both Consumer Products and Pet Products also benefited the top line.
First-quarter EPS of $0.30 was up $0.34 from first-quarter fiscal 2009 EPS (loss) of ($0.04). The significant increase was primarily driven by the benefit of fiscal 2009 pricing actions, which was partially offset by volume elasticity. Base volume growth, lower costs and lower interest expense also benefited EPS.
Source: Del Monte Foods
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