uploads/2016/02/Pinnacle-Foods-Revenue-Rose-in-4Q15-2016-02-281.jpg

Did Pinnacle’s Revenue Benefit from the Gardein Acquisition?

By

Updated

Sales rose 2.4%

In 4Q15, Pinnacle Foods (PF) reported sales of $723 million—an increase of 2.4% compared to 4Q14. The revenue for 4Q14 was $705 million. The revenue missed analysts’ average estimate of $727 million for the quarter by ~1%. The company has been delivering positive YoY (year-over-year) revenue growth since 1Q14 except for 4Q14. For the year, net sales rose 2.5% to $2.6 billion. It was $2.59 billion in 2014.

Article continues below advertisement

What contributed to the revenue?

The increase in fourth quarter sales reflected a 1.6% benefit compared to 4Q14 from approximately six extra weeks of Gardein sales in 2015. It also indicated a benefit from the higher net price realization of 2.0%. The lower volume or mix of 0.8% and unfavorable foreign currency translation of 0.4% partially balanced the benefit.

The North America retail business includes the Birds Eye Frozen and Duncan Hines Grocery segments. North America retail net sales also grew by 2.7% to $639.6 million in 4Q15. It was $622.7 million in 4Q14. This rise also showed higher net price realization of 2.1% and a 1.9% benefit from Gardein. These benefits were also partially compensated by a lower volume or mix of 0.8% and unfavorable foreign currency translation of 0.5%. The full-year rise in sales also had a 2.3% benefit from Gardein and a 1.3% benefit from higher net price realization. These benefits were partially balanced by a lower volume or mix of 0.7% and unfavorable foreign currency translation of 0.4%.

For the year, North America retail sales grew by 3.3%. The sales were led by a 2.6% advantage from the Gardein acquisition and higher net price realization of 1.3%. These were partially balanced by unfavorable foreign currency translation of 0.4% and a lower volume or mix of 0.2%.

Competitors’ revenue

Pinnacle’s peers like Tyson Foods (TSN), Hain Celestial (HAIN), and Mead Johnson (MJN) reported revenue of $9.1 billion, $753 million, and $967 million for their last quarter, respectively. The First Trust Capital Strength ETF (FTCS) and the Fidelity MSCI Consumer Staples Index ETF (FSTA) invest 2.7% of their portfolio in Mead Johnson.

Next, we’ll discuss how Pinnacle’s segments contributed to its 4Q15 performance.

Advertisement

More From Market Realist