Del Monte Pacific (D03) Q4 2024 earnings summary

Executive summary

• Full-year sales were stable at $2.4 billion, with Q4 sales up 2% to $597 million, driven by strong fresh exports offsetting US declines.

• Net loss widened to $127 million for FY2024, mainly due to lower gross profit, higher interest, and one-off expenses.

• Maintained leading market share in core US and Philippine categories.

• Inventory imbalances and category declines led to increased waste, write-offs, and costs.

• Strategic actions include pack reductions, plant closures, and operational improvements to restore profitability.

Financial highlights

• Gross margin fell from $607 million to $422 million, with a $185 million year-over-year drop and inflationary impact of $110 million.

• Q4 gross profit dropped 48% to $61.8 million; gross margin fell to 10% from 20%.

• FY2024 EBITDA decreased 60% to $133.2 million; net loss was $127.3 million.

• Pricing actions offset some inflation, with $127 million in annualized price increases.

• Free cash flow improved due to working capital management, despite lower EBITDA.

Outlook and guidance

• Modest gross margin improvement expected in FY25, with more significant recovery in FY26 as inventory normalizes.

• FY2025 priorities include selective asset sales, equity injection, restoring gross margins, reducing costs, and innovation focus.

• High inflationary costs expected to persist in 1H FY2025; margin restoration expected from 2H.

• Net loss expected in FY2025, but at a reduced amount; full impact of initiatives to be seen in FY2026.

• DMFI gross margin targeted to reach 18-19% by FY26.