Mr Kipling maker Premier Foods' sales rise on cakes, sauces demand
Premier Foods Reports Strong First-Quarter Sales Growth
By Prerna Bedi
First-Quarter Performance and Key Drivers
July 16 (Reuters) - Mr Kipling maker Premier Foods posted a 4% rise in first-quarter branded sales on Thursday, helped by strong demand for its new birthday cakes and cooking sauces and keeping the packaged foods group on track to meet full-year expectations.
Product Innovation and Market Focus
The company, which supplies packaged foods to major supermarkets including Tesco, Morrisons and Lidl, has been focusing on new products catering to health- and value-conscious shoppers to help offset broader weakness in consumer sentiment.
New Product Launches
"New product development was again a major contributor to this growth, with recent launches such as Birthday cake slices and a new range of whirls flavours, such as Cookies & Cream and Custard Cream," the company said in a statement.
Sales Breakdown and Revenue Highlights
Sales from Premier Foods' newer line-ups rose 16% in the three months ended June 27, while sales of its branded products, which account for most of the revenue, rose to £225.1 million ($304.56 million) from £216.2 million last year, driven by sweet treats.
Market Challenges and Analyst Insights
External Pressures Impacting Performance
The company logged the gains despite a challenging backdrop where an extreme heatwave in Europe has deterred shoppers from heading out, and higher costs linked to the Iran war are pressuring households already squeezed by economic uncertainty.
Analyst Commentary
While Peel Hunt analysts said that trends in Premier Foods' trading were positive given the pressures, RBC Europe on the other hand flagged some underperformance against the brokerage's own sales expectations given the warm weather.
Stock Performance and Outlook
Share Price Movement
Shares in Premier Foods were down nearly 2% by 0750 GMT. Still, the stock has gained about 13% so far this year.
Profit Forecast
Premier Foods forecast annual trading profit to be in line with average market expectations of £211.4 million in a company-compiled consensus.
Currency Exchange Rate
($1 = 0.7391 pounds)
(Reporting by Prerna Bedi in Bengaluru; Writing by Pushkala Aripaka; Editing by Subhranshu Sahu)
