Premier Foods Q1 Earnings Call Highlights

Premier Foods reported first-quarter sales growth of 2.7%, driven by stronger branded performance that offset continued reductions in lower-margin non-branded grocery contracts. The company said it remains on track and left its full-year trading profit outlook unchanged. Branded sweet treats were a standout, with sales up 6.6% and Mr Kipling growing more than 9% on the back of innovation and core range strength. Branded grocery also rose 3%, helped by new launches such as Ambrosia pouches, Loyd Grossman sauce kits and Nissin meals. International sales increased 6% at constant currency, with double-digit growth in Europe and North America and more than 20% growth for The Spice Tailor in Australia. Premier Foods also said its acquired brands — The Spice Tailor, FUEL10K and Merchant Gourmet — all delivered double-digit sales gains.

Premier Foods said first-quarter sales rose as growth in its branded portfolio offset continued pruning of lower-margin non-branded grocery contracts, and the company left its trading profit expectations for the year unchanged. Chief Executive Alex Whitehouse told analysts that the update covered the 13 weeks to June 27 and said the company was “on track at this early stage in the year.” Group sales increased 2.7%, while U.K. branded sales rose 3.8%. Overall branded sales were up 4%, which Whitehouse said was ahead of the market and helped the company gain further market share. Whitehouse attributed the performance to Premier Foods’ “Branded Growth Model,” which he described as a focus on leading brands, consumer-led product development, advertising and marketing, digital engagement and close work with retailers on category growth and in-store execution.

Branded sweet treats sales rose 6.6% in the quarter, led by Mr Kipling, which grew by more than 9%. Whitehouse said Premier Foods’ branded sweet treats have now grown by an average of 8% over the last 11 quarters. He said innovation continued to support the category, alongside strength in the core product ranges. Recent launches included Mr Kipling Birthday Cake Slices, which followed the company’s Birthday Cake Tarts, and a new range of Mr Kipling Whirls in flavors including Cookies & Cream. Whitehouse said the birthday cake flavor was inspired by a trend observed in the U.S., while the Whirls range was designed to appeal to younger consumers. Other recent innovation included Mr Kipling Cake Bites, aimed at sharing and portion control, and Mr Kipling Breakfast Bakes, which the company said target a different time of day from much of the brand’s existing consumption.

Premier Foods’ branded grocery sales increased 3% from a year earlier. New products included Ambrosia custard pouches, which Whitehouse described as convenient lunchbox options containing 100 calories per pouch; Loyd Grossman premium cooking sauce kits in a three-step format; and Nissin Kanzen meals in a pot, which he said contain more than 20 grams of protein and 26 essential vitamins and minerals. The company also cited contributions from products launched last year, including OXO Bone Broth and Angel Delight Bubble Jelly, which Whitehouse said supported sales growth and share gains. Non-branded sweet treats sales increased 5.3%, helped by stronger volumes in pies and tarts and a contract win for cake slices. Whitehouse said the company now expects modest growth in non-branded sweet treats for the year. Non-branded grocery sales were GBP 2.5 million lower in the quarter as Premier Foods continued to exit some contracts. Whitehouse said the company has been “right-sizing” that part of the business, with a medium-term aim for non-bran...