Premier Foods PLC (LON:PFD) reported a 2.2% drop in sales for the Christmas period, reflecting a decline in non-branded foods.
The company, whose brands include Angel Delight, Bisto and Mr Kipling, said group sales in the third quarter to December 29 fell to £225.6mln with non-branded sales down 10.3% and branded sales up 0.2%.
Sales in the grocery business dipped 0.1% as lower sales at Knighton Foods offset contract wins in stuffing and cooking sauces.
Sweet treats sales dropped 6.9% due to implementation challenges associated with its logistics programme for non-branded items.
International sales slumped 27% in the quarter as the company struggled to offload high stocks of Cadbury cake in Australia and as the decision to raise prices for export wholesalers led to weaker demand.
Premier Foods leaves profit guidance unchanged despite higher costs
“We faced into two sets of challenges in the quarter - lower International sales and our logistics programme, which as expected, affected cake sales volumes early in the quarter,” said chief executive Gavin Darby, who is stepping down at the end of this month.
“As we look to the fourth quarter, we expect to see a good performance from branded sweet treats, we have a good innovation plan lined up and our expectations for trading profit and adjusted earnings per share for the full year are unchanged."
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The group expects full-year cash exceptional costs to be £6-7mln higher than previously anticipated due greater-than-expected implementation costs related to the logistics transformation programme.
Premier Foods prepares for hard Brexit
It also expects the rate of net debt reduction to be lower than the previous year as it stockpiles products to protect itself against the risk of a no-deal Brexit.
Premier Foods added that it continues to hold talks with third parties for the potential sale of its Ambrosia custard brand.
The group is searching for a new chief executive to replace Darby but in the meantime, chief financial officer Alastair Murray will assume the role on a temporary basis.