PITTSBURGH H. J. Heinz Co. stated today that it expects to report continued strong sales and profit momentum when it releases third-quarter results Feb. 26. Preliminary results include sales growth of approximately 14 percent and operating income growth of approximately 8 percent. The company is optimistic that it will achieve full-year EPS growth of 9 percent to 10 percent compared with last year.
Heinz expects third-quarter organic sales growth (volume plus price) of between 8 percent and 9 percent, driven by a volume increase of roughly 5 percent, and net pricing of more than 3 percent. The very strong organic results were led by the strength of the Heinz brand, with organic sales up more than 9 percent. The anticipated organic sales figures in the third quarter represent the continuation of the Company’s strong organic sales growth over the past two years. For the quarter, foreign exchange is expected to contribute roughly 5 percent of growth.
Heinz operating income is expected to increase 8 percent for the quarter, driven by continuing momentum in North American Consumer Products, Europe, Asia/Pacific and the rest of the world, partially offset by the U.S. foodservice business. The company said it generates 60 percent of its sales outside the United States.
The company anticipates third-quarter EPS of $0.67 to $0.68, reflecting a higher tax rate in the quarter of 31.5 percent to 32.5 percent, compared with the previous year rate of 26 percent. These results put Heinz on track to achieve its full-year targets including its plans to continue investing in commercial innovation and capability-building initiatives. The company has narrowed its expected full-year EPS forecast to the top end of its previously announced range to $2.60 to $2.62, a 9 percent to 10 percent increase over last year.
The fiscal third quarter for Heinz ended on Jan. 30, 2008.
Heinz is a global family of leading branded products, including Heinz ketchup, sauces, soups, beans, pasta and infant foods (representing over one-third of Heinz’s total sales), Ore-Ida potato products, Weight Watchers Smart Ones entrees, Boston Market meals, T.G.I. Friday’s snacks, and Plasmon infant nutrition. Heinz is famous for its iconic brands on five continents, showcased by Heinz ketchup.