Dean Foods Co. announced it will be cutting jobs in its processing plants after profit losses.
The discounting prompted Dean’s chief executive to describe prices as dropping “beyond sustainable levels.” Dean, the nation’s largest dairy processor, said that its profit fell 43 percent to $43.15 million, or 24 cents a share. That compares with profit of $76.25 million, or 48 cents a share, a year ago.
Dean shares closed Monday at $10.47 – a tumble of 28.43 percent, the largest one-day decline in at least six years. The company blamed its poor profit picture on retailers taking “zero profit” on their own store-brand milk.
“Our most profitable brands, the ones with the highest [price] premiums, suffered the most,” said Gregg Engles, chairman and CEO. He called the pressure on milk prices intense. The retail price wars could strip more than $100 million from company margins this year, he said.
To shore up the bottom line, Dean said it will cut up to 400 jobs in its largest division, Fresh Dairy Direct/Morningstar, which sells milk and other traditional dairy products under private labels and regional brand names. The cuts, expected to save the company $25 million, are on top of 150 jobs eliminated earlier this year. The cuts will come nationwide throughout the year.
First-quarter sales were $2.97 billion, up nearly 10 percent from a year ago, thanks to increased sales at its division that sells organic and soy milk. Also, as the prices Dean pays to dairy farmers increase, Dean is permitted by the government to pass those costs on to customers, including retailers.
Source: The Dallas Morning News
3 Comments on “Dean Reports Losses”
Well as a dairy farmer, my heart goes out to them. They manipulated markets competion and regional markets. As we lost many thousands of hard fought money and equity while they overpriced consumers, I hope they enjoy a good swallow of humiliation.
Well as a dairy farmer, my heart goes out to them. They manipulated markets competion and regional markets. As we lost many thousands of hard fought money and equity while they overpriced consumers, I hope they enjoy a good swallow of humiliation.
Well as a dairy farmer, my heart goes out to them. They manipulated markets competion and regional markets. As we lost many thousands of hard fought money and equity while they overpriced consumers, I hope they enjoy a good swallow of humiliation.