Premier Foods blames warm weather for drop in sales during second quarter

Caitlin Morrison
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Londoners Make The Most Of Late Summer Sunshine
Brits shunned gravy, stocks and desserts because of the warm weather this summer (Source: Getty)

Premier Foods has reported a 5.4 per cent drop in sales during the second quarter of the year, and placed the blame firmly on the warm weather in September.

The group's share price plummeted by 14.5 per cent in mid-morning trading.

However, the group, which produces foods for brands such as Bisto, Birds, Lloyd Grossman and Mr Kipling, said profit expectations for the year remain unchanged "due to the careful management of costs".

Premier Foods said the fact September was "the second equal warmest since records began" and "every week in the quarter was warmer than the prior year" had a significant adverse impact on some key grocery categories in the quarter; for example, the gravy and stocks category, which declined 13 per cent in volume terms, and the desserts category, which decreased by nine per cent.

Overall, grocery branded sales in the quarter dropped by 9.5 per cent lower than in the same period of last year, meaning a decline of four per cent in the first half.

"We are disappointed that our grocery business reported materially lower sales in the quarter due to warmer weather; particularly in September," said chief executive Gavin Darby.

"However, our sweet treats and international businesses continued to demonstrate their strong momentum, delivering against our strategic priorities and growing over six per cent and 13 per cent respectively.

"We remain very confident in our strategic progress, our customer relationships are strong and we have an extensive new product innovation programme planned for the balance of the year. We expect group sales to grow between two and four per cent in the second half of the year and our profit expectations for the full year remain unchanged."

Premier Foods recently announced chairman David Beever is stepping down.

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