A strong performance from its Birds Eye Frozen division powered Pinnacle Foods’ third quarter growth performance, as the Parsippany, New Jersey, USA-headquartered company reported on October 29 that overall sales for the three-month period ending on September 27, 2015, increased by 2% to $636.3 million. This reflected a 2.6% benefit from plant-based protein brand Gardein (acquired from Garden Protech International earlier this year) and higher net price realization of 0.9%, partially offset by lower volume/mix of 1.0% and unfavorable foreign currency translation of 0.5%.
Net sales generated in the Birds Eye segment advanced 15.3% to $296.7 million in Q3 compared to $257.4 million in the prior-year period, reflecting growth of 9.1% from the base business and a benefit of 6.2% from the Gardein acquisition. The strong base business performance reflected higher volume/mix of 7.6% and higher net price realization of 1.5%.
The Birds Eye Flavor Full and Birds Eye Protein Blends platforms, launched earlier in the year, fueled the growth of Birds Eye vegetables, while distribution gains and the expansion of family size offerings drove sales in the Birds Eye Voila! range.
During the quarter, the company introduced a line of Disney-themed pasta and vegetable side dishes under the Birds Eye Steamfresh brand, as well as a new Birds Eye Voila! platform, which offers consumers four non-chicken varieties including beef, pork and shrimp items, at a premium price point.
Other retail frozen food brands in the division are Van de Kamp’s and Mrs. Paul’s prepared seafood, Hungry-Man dinners and entrees, Aunt Jemima breakfasts, Lender’s bagels, and Celeste pizza.
EBIT for the Birds Eye Frozen segment increased 17.2% to $52.0 million in Q3, compared to $44.3 million in the third quarter of 2014. Excluding items affecting comparability, EBIT advanced 19.3% to $57.3 million, reflecting the strong net sales growth and productivity savings, partially offset by input cost inflation.
Third quarter results for the company’s other segments were disappointing. Net sales for Duncan Hines Grocery (which includes baking mixes, frostings, shelf-stable pickles, salad dressings, syrups and other products) declined 5.1% to $257.4 million, while net sales in the Specialty Foods division (potato chips, popcorn and other snacks) fell 13.9% to $82.2 million.
Commenting on the overall results, Pinnacle Foods CEO Bob Gamgort stated: “We are pleased with our performance in the quarter. Strong top- and bottom-line results in North America Retail were driven by strength of the base business, including the benefit of our recently launched innovation, and the Gardein acquisition. We again outpaced the performance of our composite categories, and we expanded our gross margin meaningfully.”
The company’s management team, remaining confident about the remainder of 2015, has reaffirmed its forecast for full-year adjusted diluted earnings per share of $1.89 to $1.91, representing growth of 9-10% versus year-ago results.
