Frozen specialist Nomad Foods has nudged up its full-year earnings expectations after double-digit price hikes bolstered first quarter earnings.
The Birds Eye and Goodfella’s owner reported sales growth of 5.8% in the first three months of the year to €775m.
This growth was despite a 7.1% drop in sales volumes, which was negated by year-on-year prices hikes of 15.1%.
That pricing action helped boost gross profits by 9.5% to €224m as margin increased 100bps to 28.9%, driven by the recovery of input costs through price and the benefit in the cost of goods sold from previously hedged positions in 2022.
Adjusted operating expenses were up 6.1% to €100m, but adjusted EBITA increased 11.3% to €146m due to these benefits.
Nomad CEO Stéfan Descheemaeker said: “Nomad Foods got off to an exciting start in 2023 as our revenue momentum from the second half of last year continued through the beginning of this year.
Double-digit
“Our strong overall performance benefited from double-digit pricing realisation, disciplined supply chain management, and the rollout of the new commercial and supply chain strategies that we announced in February.”
As a result of this first quarter performance, the group is raising the bottom end of its expected adjusted earnings per share range to €1.52 from €1.50, based on mid-single-digit organic revenue growth.
Co-chairman and founder Noam Gottesman added: “We are delighted to report a strong set of results to start 2023, anchored by leading brands, top-notch people, and excellent supply chain execution. The steps we took to further refine and protect our business last year were evident in our performance during this quarter and have proved Nomad Foods’ continued resilience.
“We delivered double-digit pricing, maintained our investment in long-term growth, and expanded margins, which positions us well for the balance of the year and gives us confidence to deliver our revised guidance. Frozen food remains a compelling value proposition to our consumers in any economic environment, and we see more opportunities ahead. We will continue to invest in sustainable growth and driving value for shareholders.”
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