Del Monte Foods’ (NYSE:DLM) fiscal first-quarter net income inched higher by 1.4%, but the maker of Kibbles ‘n Bits cut its full-year sales view amid the struggling economic recovery and declining consumer sales.
The San Francisco-based food company said it earned $59.4 million, or 29 cents a share, compared with a profit of $58.6 million, or 29 cents a share, in the year-earlier period. Analysts had expected EPS of 27 cents.
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However, revenue slid 1.1% to $804.6 million, missing the Street’s view of $829 million. Pet products sales grew by 3.6% to $427.3 million, while consumer products sales slid 6% to $377.3 million.
“We are not satisfied with our first quarter consumer sales, but expect performance will strengthen in the second half as competitive and category performance return to historical levels and as we deliver growth through the key holiday seasons,” CEO Richard Wolford said in a statement. “Our margins were strong in Q1, as we delivered on our productivity savings and improved our overall product mix, while we continued to invest in key brands.”
Del Monte backed its fiscal 2011 EPS view of $1.38 to $1.42, the midpoint of which would come in just shy of consensus calls for $1.41. However, the company downgraded its full-year sales growth forecast by one percentage point to a range of 1% to 3%.
“For fiscal 2011, we are maintaining our EPS and cash flow targets, reflecting the successful margin and working capital management capabilities. We remain confident in our competitive, long-term growth model, driven by brand-based fundamentals, our growth strategy, and the strong margin structure we have established,” Wolford said.
Shares of Del Monte, which have rallied 16% so far this year, had little reaction to the results and new guidance, rising 0.08% to $13.17 Thursday morning.