Del Monte 3Q Net Down 1% on Higher Costs

By Retail FOXBusiness


Del Monte Corp. said on Friday its third-quarter earnings eased 1%, as the privately-held food maker increased advertising spending and saw higher ingredient costs.

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Del Monte, which in March 2011 was taken private in a $4 billion deal led by KKR (KKR), Vestar Capital Partners and Centerview Partners, makes food and pet products under brands such as namesake Del Monte, S&W, College Inn, Meow Mix and Kibbles 'n Bits.

The company is separate from fruit and vegetable provider Fresh Del Monte Produce (FDP), which purchased Del Monte Foods Europe in 2004 and has a license to use the Del Monte trademark for certain products worldwide.

Profit for the quarter was $28.3 million, slightly down from $28.6 million in the year-earlier period. Del Monte said it benefited from a $700,000 tax benefit in the third quarter versus a $1.3 million tax benefit the prior year.

Sales rose 5.9% to $1.03 billion.

Pet product sales climbed 10% to $527 million, while the segment’s profit fell 8.6%. The segment faced higher ingredient costs and expenses for the voluntary recall of certain Milo's Kitchen chicken dog treats.

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Consumer-product sales were up 1.8% to $501.2 million and profit fell 21%, as Del Monte increased its investment in marketing for consumer products.