Nomad Foods, the frozen food giant behind brands like Birds Eye and Findus, served up a first-quarter earnings beat on Thursday that had investors feeling optimistic — even if the meal came with a side of inflation.
The company reported adjusted earnings of $0.27 per share, topping the analyst consensus of $0.21. Revenue came in at $837.5 million, also ahead of the $796.2 million Wall Street had expected. But compared to the same quarter last year, earnings per share dropped from $0.37, and the headline numbers masked some underlying pressure.
Organic revenue fell 5.3%, dragged down by a 4.4% decline in volume. Gross profit slid 13.2% to €184 million ($216.5 million), and gross margin contracted 210 basis points to 25.7%. The company blamed supply chain inflation and the timing of price increases for the squeeze. Adjusted EBITDA also took a hit, falling 22.9% to €93 million ($109.4 million).
Despite those headwinds, management raised its full-year adjusted earnings guidance. The new range is $1.72 to $1.90 per share, up from $1.71 to $1.89, and above the $1.70 analyst estimate. The company ended the quarter with €282.5 million ($331.8 million) in cash and equivalents.
CEO Dominic Brisby struck an upbeat tone, noting “meaningful progress” in strengthening the company’s foundation. “Since the beginning of the year, we have successfully secured our planned level of price increases,” he said, adding that the company has recruited top-tier talent and two new Regional Presidents.
Founder Noam Gottesman also chimed in, saying, “Our market advantages are increasingly evident, with accelerating category growth and resilient demand.”
Investors seemed to buy the story. Shares of Nomad Foods (NOMD) rose 3.85% in premarket trading to $10.51.
