WhiteWave Foods (WWAV) completed two acquisitions in 2015. The acquisition of Wallaby Yogurt Company was completed in August 2015 for a purchase price of ~$125 million in cash. It also completed its Vega Acquisition in August for a purchase price of ~$550 million in cash.
The company expects better performance and contributions from recent strategic acquisitions.
The company delivered a good operating profit of $102 million in 3Q15, a rise of 25% over 3Q14. Analysts expect an operating profit rise of 30% to $113 million in 4Q15. WWAV’s operating margin is expected to be around 10.9% compared to 9.5% in 4Q14.
Guidance for 2015
For 4Q15, WWAV expects net sales growth of 15%–16% on a constant currency basis. On a US dollar basis, it’s anticipated to be 13%–14% growth. For 2015, they estimate ~16% growth on a constant currency basis and ~13% growth on a reported basis. Organic constant currency net sales growth is expected to be 10% for 2015.
The company expects to report its highest level of operating profit growth in 4Q15. Continued cost leverage, better commodity prices, higher productivity levels and other cost overlaps, and improved levels of contribution from completed acquisitions are expected to cause this increase. The forecast for adjusted operating income percentage growth in 4Q15 is in the low to mid-thirties on a constant currency basis.
For 2015, management estimates adjusted operating income percentage growth in the mid- to high twenties on a constant currency basis. Interest expense is estimated to be ~$58 million–$59 million for 2015 and ~$19 million–$20 million in 4Q15, mainly because of the financing of completed acquisitions.
WWAV’s 4Q15 tax rate is expected to be around 34%. An increased mix of international earnings is expected to lower its overall effective tax rate, thus resulting in a 34% tax rate for 2015.
WWAV’s competitors in the industry include General Mills (GIS), Kellogg Company (K), and McCormick & Company (MKC). These companies reported operating earnings of $906 million, $334 million, and $212 million, respectively, in the last reported quarter.
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