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Dean Foods sees signs of dairy retail stability

18-Feb-2011

Dean Foods said it is beginning to see signs of stability after a tough 2010 saw the US dairy giant suffer from tough private label competition and retailer promotions.

In its Q4 earnings release, CEO Gregg Engles said: “We have, however, begun to see signs that the fluid milk category is stabilizing, albeit at historically low levels of profitability.

“Some retailers have taken early steps to reduce heavy private label promotions and our regional brand volume mix has begun to stabilize.”

Nevertheless dairy commodity prices are on the rise and Engles admitted in a conference call that this would put a drag on earnings in the first half of 2011.

For the final quarter of 2010 Dean reported net sales growth of 5.5 per cent to $3.15bn. This was just below analyst expectations but shares in the company rose nonetheless on better than expected profit figures.

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