Milling & Baking News - May 8, 2018 - 12
Bimbo North America profits under
pressure; Mexico results strong
MEXICO CITY - Operating income
of the North America business of
Grupo Bimbo S.A.B. de C.V. fell in
the first quarter ended March 31
while sales moved higher on a constant currency basis.
Bimbo Bakeries USA operating income in the first quarter was 1,210 million pesos ($60 million), down 14% from
1,406 million pesos in the first quarter
last year. Net sales were 31,983 million
pesos ($1,712 million), down 6% from
34,002 million pesos a year earlier. Sales
in dollar terms were up 2%.
"The improvement in dollar terms
reflected price increases, good performance in the snacks category, strategic
brands in the U.S. and the bread category in Canada, and to a lesser extent,
the contribution from the integration
of the U.S. operation of Bimbo Q.S.R.,"
Bimbo said. "Nonetheless, continued
pressure in the private label, premium
and frozen categories continued to
weigh on sales."
Profitability was adversely affected
by higher input costs, and Bimbo said
operating income would have been
worse but for cost reduction initiatives, including zero-based budgeting
in North America.
In an April 27 conference call with
investment analysts, Fred Penny,
president of B.B.U., was asked about
a voluntary separation program announced April 13.
"We expect to see approximately a
15% reduction in our salaried workforce as we get through the process,"
he said. "But we are in the selection
window right now, so we don't know
exactly how that's going to come out."
He said he expected the company to
take a charge against earnings in the
second quarter and to begin seeing
cost savings in the third.
Net majority income of Grupo
Bimbo was 1,271 million pesos ($68
million), up 28% from 996 million in
the same period last year. Sales were
67,154 million pesos ($3,594 million),
up 1.6% from 66,080 million pesos.
The company's operating income in
Mexico jumped 19%, and sales there
were up 11%.
Daniel Servitje, Bimbo c.e.o., expressed
Promotions help boost business
at Dunkin' Donuts in first quarter
CANTON, MASS. - Holiday promotions, particularly for donuts, will continue at Dunkin' Donuts.
"During the quarter, we continued
to see proof that Dunkin' as a brand
is a consumer destination on holidays and for celebratory events like
Valentine's Day, St. Patrick's Day,
Fat Tuesday and, of course, 'March
Madness,'" said David L. Hoffman,
president of Dunkin' Donuts U.S. and
Canada, in an April 26 earnings call to
discuss first-quarter results. "We had
our highest daily donut sales on record this past Valentine's Day, a 10%
year-over-year increase, with more
than 70% of donut transactions with
an attached product. You will continue to see us make a big deal about
the holidays at Dunkin', particularly
leveraging our donuts in a fun and
Dunkin' Donuts U.S. reported revenues of $139.9 million in the quarter
ended March 31, which were up 2.8%
from $136 million in the previous
year's first quarter. Segment profit
of $105.1 million was up 3.3% from
12 / May 8, 2018
Milling & Baking News
$101.7 million. Comparable store sales
slipped 0.5% as a decline in traffic
offset an increase in average ticket.
Dunkin' Donuts International recorded first-quarter revenues of $5.4
DUNKIN' BRANDS GROUP, INC.
million, up 11% from $4.8 million.
Segment profit of $3.2 million was up
125% from $1.4 million.
Canton-based Dunkin' Brands
Group, Inc., the parent company of
Dunkin' Donuts and Baskin-Robbins,
had net income of $50.2 million, or 58c
per share on the common stock, in the
serious concern about Mexico's political
"I would like to emphasize that although we continue to be positive about
the global outlook for the year, we are at
the same time cautious and concerned
about the potential volatility and change
in the direction of our country," he said.
"As you know, we will have the largest
electoral process ever on July 1. These
are not business as usual times. There's
much at stake for Mexico in this election.
Our investment policy has always been
prudent. Our geographic and revenue
diversification remains a key strength
as we don't rely on one country, but the
current situation in Mexico demands a
"We are currently working on different fronts. We are reviewing and
delaying part of our CapEx. We are
tightening our cost structure in order to prepare ourselves for a volatile
economic environment in Mexico in
which our consumers and customers
may be affected as well. We are following closely what the president candidates are saying and taking every
measure to face the possible challenges ahead. As a Mexican company, we
remain committed to our country, our
communities and our associates." MBN
first quarter, which was up 13% from
$44.3 million, or 48c per share, in the
previous year's first quarter. Revenues
of $301.3 million were up 1.7% from
Baskin-Robbins U.S. posted firstquarter revenues of $10.5 million,
down 0.6% from $10.6 million. Segment profit of $7.2 million was down
2% from $7.4 million. Comparable
store sales declined 1%.
"Despite the negative comp growth,
we're optimistic about the strength of
our beverage and dessert categories,"
said Nigel Travis, chairman and chief
executive officer of Dunkin' Brands
Group. "Increases in beverages came
largely from our core shakes category, which we reformulated and put
renewed focus on during Q1. Polar
Pizza, the newest item in our desserts
category, saw double-digit growth
during the quarter. Importantly, our
value programs performed well, with
Celebrate 31 and cakes starting at
$12.99 all driving incremental transactions and sales."
Baskin-Robbins International reported first-quarter revenues of $25.9
million, down 1.5% from $26.3 million. Segment profit of $7.4 million
was down 9% from $8.2 million. MBN
bakingbusiness.com / world-grain.com