Western market continues to chafe Del Monte Pacific's bottom line
Its losses in US segment widened 46% to $12.6m.
If it was not for its robust Asian market, Food and Beverage (F&B) company Del Monte Pacific might have incurred much more losses.
According to DBS analyst Alfie Yeo, strong sales growth and margins from its Asia Pacific market offset the group's underwhelming performance in the United States market, where the group was hit with a 46% loss YoY to $12.6 million.
"Headline revenue was dragged by the Americas which recorded -6.3% y-o-y decline in sales. The decline was largely attributed to reduced sales in non-branded products in private labels, food service and volume sales reduction in loss of US Department of Agriculture business," Yeo said.
With this, the analyst said the company should better position its US segment for the upcoming Thanksgiving and Christmas.
"Gross margins were lower at 16.1% vs 19.2% last year due to higher trade
promotional spend ahead of Thanksgiving and Christmas. As a result, market share for packaged fruit and vegetables has increased," he stated.
Meanwhile, all these were offset by its strong sales in the Asian market, with revenue rising 11% to $150 million.
For the quarter ending in July, the group reported a narrowed net loss $11.8m, a 18.3% improvement from its net loss last year.