Boston, MA 09/26/2014 (wallstreetpr) – A packaged food company, Diamond Foods, Inc. (NASDAQ:DMND) President and the Chief Executive Officer, Brian Driscoll, blamed cost inflation for adversely impacting its gross margin during the fourth quarter. The company had to spend higher costs for logistics, as well as, tree nut.
Gross Margin Falls
The company disclosed that its gross margin dipped to 22.5% from 26.6% of net sales in the year-ago quarter hurt by commodity cost pressures, which was also indicated in the third quarter, according to its statement.
Diamond Foods, Inc. (NASDAQ:DMND)’ CEO said that its top line performance was satisfactory since it could gain market share in the snacks, as well as, nut segments due to its distribution channels. He indicated that the company was taking necessary steps to face the cost of inflation pressures so as to improve its gross margin in the coming quarters.
4Q Results
The company reported a net loss of $1.86 million or a loss of six cents a share in the fourth quarter, narrower than $143.74 million or a loss of $6.56 a share in the previous year quarter. On an adjusted basis, net income surged 163.3% to $6.16 million from $2.34 million while earnings jumped 90% to 19 cents a share from ten cents a share in the year-ago quarter.
Diamond Foods, Inc. (NASDAQ:DMND)’ net sales advanced 9.6% to $219.07 million from $199.8 million in the same quarter last year. While net sales from Snacks division grew 11.1% to $130.1 million from $117.1 million, net sales in Nuts division rose 7.5% to $88.9 million from $82.7 million.
The company’s total operating costs dropped to $41.16 million from $197.88 million as selling, general and administrative expenses plunged to $30.2 million from $129.15 million in the previous year quarter.
Outlook
Diamond Foods, Inc. (NASDAQ:DMND) said that it expects to deliver adjusted earnings of $0.90 – $1.10 a share for the fiscal year 2015. Similarly, it expects achieve adjusted EBITDA of $115 – $123 million and predicts input cost inflation of 3% – 4% during the same period. On average, Wall Street analysts, predict the company to report earnings of $1.18 a share.
