Pinnacle Foods Inc. recently reported its financial results for the first quarter which ended March 29, 2015 and reaffirmed its outlook for full-year adjusted diluted earnings per share in the range of $1.86 to $1.91, representing growth of 7-10% versus last year.
Consolidated net sales in the first quarter of 2015 increased 3.3% versus year-ago, reflecting the benefits of the Gardein acquisition, modest volume/mix growth on the base business and higher net price realization. Net sales for North America Retail, which is comprised of the Birds Eye Frozen and Duncan Hines Grocery segments, increased 3.6% versus year-ago.
Net sales for the Birds Eye Frozen segment advanced 8.0% to $317.9 million in the first quarter of 2015, compared to $294.3 million in the year-ago period. This performance reflected a 5.2% benefit from the Gardein acquisition, increased volume/mix of 1.8% and higher net price realization of 1.0%, primarily driven by the timing of new product introductory costs. The earlier timing of Easter in 2015 benefitted the first quarter net sales comparison by approximately 2%.
Net sales growth for the quarter was registered across all the Leadership Brands, driven by the continued strength of the Birds Eye vegetables and Birds Eye Voila! skillet meals business and growth of Mrs. Paul’s and Van de Kamp’s frozen prepared seafood, including the benefit of the introduction during the quarter of flavor encrusted fillet varieties. Partially offsetting this growth were lower sales of the Foundation Brands.
EBIT for the Birds Eye Frozen segment declined 7.4% to $43.3 million in the first quarter of 2015, compared to $46.7 million in the first quarter of 2014. Excluding items affecting comparability, EBIT decreased 0.8% to $46.8 million, driven by input cost inflation and higher marketing investment, partially offset by the net sales growth and productivity savings.
Commenting on the results, Pinnacle Foods Chief Executive Officer Bob Gamgort stated, “We are pleased with our solid start to 2015. Market share growth across our portfolio—particularly on our Birds Eye franchise—enabled us to offset weak composite category performance, and we delivered modest gross margin expansion in a quarter in which input cost inflation exceeded productivity. We are excited about our innovation for this year, much of which will be launched in the second quarter, and we remain confident in our previous outlook for 7% to 10% growth in EPS for the year.”