Pinnacle Foods Reports Strong 1st Quarter Fiscal 2017 Results
Company Reaffirms Guidance for the Year
Parsippany, NJ, April 27, 2017 - Pinnacle Foods Inc. (NYSE: PF) today reported strong results for the first quarter ended March 26, 2017 and reaffirmed its guidance for Adjusted Diluted Earnings Per Share for the year.
Diluted earnings per share, including costs related to the Company’s recent refinancing and other items affecting comparability, decreased 9.5% to $0.19 in the first quarter of 2017, compared to $0.21 in the first quarter of 2016. Adjusted Diluted Earnings Per Share1, which excludes items affecting comparability, advanced 25.0% to $0.50, compared to $0.40 in the year-ago period.
Net sales in the first quarter of 2017 increased 1.6% versus year-ago, despite the unfavorable impact of Easter shifting to the second quarter, largely due to strong growth of the Boulder segment, including the carry-over benefit of the Boulder Brands acquisition (three extra weeks), and solid growth of the Company’s Grocery segment. As expected, net sales in the Frozen segment were unfavorably impacted by the Easter timing. Composite market share2 advanced 0.8 share points versus year-ago, marking the 12th consecutive quarter of share growth.
Commenting on the results, Pinnacle Foods Chief Executive Officer Mark Clouse stated, “We are pleased with our strong start to 2017. Our Adjusted Gross Margin advanced a healthy 120 basis points in the quarter, and we posted another period of market share and retail distribution expansion, all while maintaining our operating expense discipline. Our breakthrough Duncan Hines Perfect Size for 1 innovation launched in the first quarter is off to an exceptionally strong start, and we are equally excited about the Birds Eye new product platforms rolling out now.”
First Quarter Consolidated Results
Net sales in the first quarter of 2017 increased 1.6% to $766.1 million, compared to net sales of $754.3 million in the year-ago period. This growth was driven by the aforementioned acquisition carry-over benefit totaling 2.9%, higher net price realization of 0.4%, driven by lower new product introduction expenses versus the year-ago period, and favorable foreign currency translation of 0.1%. Partially offsetting these positive drivers was lower volume/mix of 1.8%, predominantly reflecting the unfavorable impact of Easter timing.
Gross profit in the first quarter of 2017 increased 6.3% versus year-ago to $211.1 million, or 27.6% of net sales, compared to gross profit of $198.6 million, or 26.3% of net sales, in the prior-year period. This margin expansion reflected growth of the base business and the carry-over benefit of the Boulder Brands acquisition and was primarily driven by strong productivity, the benefit of the net sales growth and items affecting comparability. Partially offsetting these growth drivers was input cost inflation. Adjusted Gross Profit advanced 6.2% to $218.3 million and, as a percentage of net sales, Adjusted Gross Profit Margin expanded by approximately 120 basis points to 28.5%.
1 Adjusted Diluted Earnings per Share, as well as other adjusted financial metrics used throughout this release, exclude items affecting comparability and are non-GAAP measures. Please see reconciliation to GAAP measures in the financial tables that accompany this release.
2 Composite market share is based on Pinnacle’s IRI custom category definitions, period ending 3/26/17.
The following information was filed by Pinnacle Foods Inc. (PF) on Thursday, April 27, 2017 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.