Pinnacle Foods Reports Second Quarter Fiscal 2017 Results
Company Maintains Full Year Guidance at Low End of Range
Parsippany, NJ, July 27, 2017 - Pinnacle Foods Inc. (NYSE: PF) today reported its financial results for the second quarter ended June 25, 2017 and reaffirmed its full-year guidance at the low end of its range.
Diluted earnings per share in the second quarter of 2017, including items affecting comparability1 decreased to $0.16, versus $0.39 in the year-ago period. Excluding items affecting comparability, Adjusted Diluted EPS advanced 26% to $0.53, compared to $0.42 in the year-ago period.
Net sales in the second quarter of 2017 decreased 1.6% versus year-ago, largely due to a 2.6% unfavorable impact associated with the second quarter 2017 business exit, including the recall, of certain Aunt Jemima retail and foodservice frozen breakfast products (the AJ exit), as well as a 0.9% unfavorable impact associated with both the Boulder UK business wind-down and SKU rationalization program implemented in the second half of 2016. Taken together, these factors more than offset strong underlying net sales growth of 1.9% in the quarter. In-market performance2 remained very strong, with retail consumption versus year-ago up 3.6% (or 4.5%, excluding Aunt Jemima) and market share advancing 0.7 share points, marking the Company’s 13th consecutive quarter of share growth versus year-ago.
Commenting on the results, Pinnacle Foods Chief Executive Officer Mark Clouse stated, “We continued to deliver strong underlying business fundamentals in the quarter. Our retail consumption and market share advanced significantly, supported by on-trend innovation, and we continued to deliver robust productivity and strong synergy capture, while aggressively managing expenses. This past quarter we made a number of strategic decisions, including exiting a low-margin business and accelerating into 2017 a number of investments in our manufacturing network that are consistent with our long-term strategic plan and that best position us for the future. While these discrete decisions impacted the quarter and the year, they are largely completed and mostly covered by the strong fundamentals and the benefits of lower taxes and interest expense. Importantly, the discrete items serve as tailwinds for 2018, enabling us to regain much of their impact next year and maintain the gross margin target we established for 2019.”
Second Quarter Consolidated Results
Net sales in the second quarter of 2017 declined 1.6% to $744.6 million, compared to net sales of $756.4 million in the year-ago period. This performance reflected underlying business strength, more than offset by the AJ exit and aforementioned Boulder impacts totaling 3.5%. The underlying net sales growth of 1.9% in the quarter was driven by higher volume/mix of 3.3%, including the benefit of the later Easter holiday, partially offset by lower net realized pricing of 1.3%, including the impact of higher new product introductory expenses, and unfavorable foreign currency translation of 0.1%.
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 In-market performance (retail consumption and market share) based on Pinnacle’s IRI custom category definitions, period ending 6/25/17
The following information was filed by Pinnacle Foods Inc. (PF) on Thursday, July 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.