(Reuters) - British food producer Premier Foods forecast annual profit at the upper end of analysts' expectations on Tuesday, following robust sales of its branded products during the holiday season,
Premier Foods Increases Profit Outlook on Strong Holiday Sales
(Reuters) - British food producer Premier Foods forecast annual profit at the upper end of analysts' expectations on Tuesday, following robust sales of its branded products during the holiday season, sending its shares up 6%.
The Christmas season bodes well for retailers in the UK, with customers splurging on discretionary items after a year of cautious spending. Premier's products include Mr Kipling mince pies and Bisto Best meat-free gravy.
"Earlier this year, we said that consumers are starting to trade up and treat themselves more. This has continued over Christmas with our premium ranges," Premier Foods CEO Alex Whitehouse said in a statement.
Analysts forecast a trading profit range of 180.1 million pounds to 186.4 million pounds ($221 million-$228.7 million) for the 2024-25 financial year, according to a company-compiled consensus.
Strong sales of premium products also helped meat producer Cranswick to a record Christmas trading period and it maintained its full-year profit guidance while remaining cautious about current market conditions.
Despite reporting healthy Christmas quarters, British supermarket groups such as Tesco and Sainsbury's, have flagged a difficult year ahead with concerns about higher taxes and faltering consumer confidence.
With larger players expected to be able to cushion the impact, analysts are expecting the burden to fall on smaller companies.
Analysts at RBC Capital Markets called Premier Foods' quarterly 7% volume growth "impressive" but said they expect this to moderate in the fourth quarter to end-March and 2025/26.
Both Premier Foods and Cranswick sell their products through supermarkets and grocery stores across the UK.
Shares of FTSE 250 index constituent Premier rose as much as 6% to 189.8 pence and Cranswick was nearly 2% higher at 4,985 pence.
Premier reported total sales of 360.1 million pounds for the quarter ended Dec. 28, 2024, a year-on-year increase of 3.1%.
($1 = 0.8149 pounds)
(Reporting by Yamini Kalia in Bengaluru; Editing by Sumana Nandy, Kirsten Donovan)
