Shares in HJ Heinz fell yesterday after the US company reported a drop in first-quarter profits.
Heinz's stock was down more than 3% after it reported a 6% decrease in net income to $226.1 million for the three months to July 27. The company's operating income fell 8.9% to $370 million.
However, costs linked to Heinz's restructuring program, announced in May, hit profits. Excluding the charges from the supply chain and manufacturing revamp, net income increased to $255 million, compared to $240.4 million a year earlier. Operating income climbed 1.1% to $410 million.
However, Heinz saw its sales rise 14.9% to $2.85 billion, boosted by the acquisitions in the last year of Brazilian condiments maker Quero and Chinese soy sauce firm Foodstar. On an organic basis, sales were up 3.1%.
Chairman, president and CEO Bill Johnston said Heinz's operations in emerging markets had managed to help the company as it navigated challenging conditions in Europe and North America.
"Emerging markets generated a record 23% of our sales in the first quarter, up from 18% a year ago. Our strategy to accelerate growth in emerging markets organically and through acquisitions in countries with fast-growing populations helped Heinz deliver strong top-line growth and solid operating results despite the economic downturn in developed markets," Johnston said.
Heinz saw sales increase by 17.5% in Europe. Sales were up 4.9% on an organic basis and volumes rose 2.2%. In North America, Heinz's sales climbed 1.7%, although volumes fell 3.1%.
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