Chiquita Brands International has reported on a weaker set of results for the second quarter of 2011, with year-on-year declines in both comparable income and net sales.
Quarterly sales for the period fell five per cent year-on-year to $870m, down from $916m last year, while net income fell from $95m in 2010 to $78m.
According to Chiquita, comparable income declined as a result of lower salad volumes and higher sourcing costs, partially offset by stronger performance in bananas.
Indeed, net sales decreased 12 per cent to $253m in the group's salads and healthy snacks segment (including its Fresh Express operations), with comparable operating income down to US$4m for the second quarter of 2011, primarily due to lower retail value-added salad volume from customer conversions to private label in 2010 and increased costs, reports Fruitnet.com.
Chiquita also endured a tricky time in its 'other produce' segment, with net sales decreasing 23 per cent to US$63m due to the discontinuation of certain low margin produce items such as melons and vegetables.
There was slight growth in the company's banana sector, however, with net sales up two per cent to $555m, as Chiquita achieved higher pricing to overcome increased supply costs due to lower banana volumes from 'industry-wide supply constraints'.
"Our second quarter results reflect the challenges we highlighted previously," said Fernando Aguirre, Chiquita chairman and CEO. "As expected, salad volumes in the second quarter were lower than last year. However, the combination of our marketing investments, Fresh Rinse technology and better cost efficiencies are already delivering new distribution points which will result in better volume comparisons the rest of the year. Also, in bananas, we delivered another solid quarter of performance despite softening of local European pricing in late May and June."
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