Mead Johnson Nutrition Company (NYSE: MJN) today announced that
it is revising full-year 2015 financial guidance based on
preliminary second quarter sales results. Results are preliminary
at this time as the Company has not yet completed its quarter close
processes. Final Q2 results will be announced on July 23, 2015.
- Preliminary second quarter constant
dollar sales(1) were 3% below the prior year quarter. Including the
impact of foreign currency, preliminary reported sales were 7%
below the prior year quarter.
- Strong sales of the recently launched
imported products to China were insufficient to fully offset
declines in the China based manufactured products. Hong Kong
cross-border sales stabilized, but were below prior year
levels.
- Preliminary year-to-date sales were
in-line with the prior year on a constant-dollar basis and 4% lower
on a reported basis.
- Slowing emerging market growth and
dairy costs approaching five-year lows drove competitive
promotional price discounting across several MJN markets in Latin
America and Asia, most notably in China.
- Preliminary non-GAAP and GAAP EPS for
the second quarter of 2015 are expected to be $0.76 and $0.80,
respectively, impacted by the sales decline and increased
Advertising & Promotion expenditure.
- Annual sales growth is expected to be
in the range of 0% to 2% on a constant-dollar basis, previously
estimated at 7%. Including the estimated impact of foreign
exchange, reported sales are expected to be 2% to 4% below the
prior year, previously estimated to be 2% above the prior
year.
- Full-year non-GAAP EPS is expected to
be in the range of $3.63 to $3.78, previously estimated at $3.90 to
$4.00. Specified Items are currently expected to be $0.07 per
share, excluding any future mark-to-market pension adjustment. As a
result, full-year GAAP EPS guidance is expected to be in the range
of $3.56 to $3.71, previously estimated at $3.79 to $3.89.
(1) Constant dollar figures exclude the impact of changes in
foreign currency exchange rates and Non-GAAP results exclude
Specified Items. For a description of Specified Items, and a
reconciliation of non-GAAP to GAAP and constant dollar results, see
the schedule titled “Supplemental Financial Information.”
“Though disappointed with our second quarter revenue
performance, especially in China, we are gratified by the continued
strong performance of our North America/Europe segment and by early
indications that our China transition strategy is working” said
Chief Executive Officer, Kasper Jakobsen. “Our line of fully
imported products, launched in China during the quarter,
contributed strongly to sales, even as we failed to entirely offset
the slowdown in locally manufactured product. I am likewise
encouraged by our strengthening performance in e-commerce. As our
new initiatives will make an ever larger contribution to our
business, I am confident that we will be recording sequential sales
growth in China by the end of the year.”
The Company will provide further details during its earnings
call scheduled for July 23, 2015.
The Company does not intend to update its guidance in the future
through an interim disclosure such as this, in the absence of
similar circumstances, and investors should not expect the Company
to provide such interim updates to its guidance.
Conference Call Scheduled
Mead Johnson will host a conference call to discuss the second
quarter, first-half results and updated guidance on July 23, 2015
at 8:30 a.m. CDT. The call will be broadcast over the Internet at
http://investors.meadjohnson.com. Conference call and replay
information is available on our website and in the Company's press
release dated July 1, 2015.
Forward-Looking Statements
Certain statements in this news release are forward-looking as
defined in the Private Securities Litigation Reform Act of 1995.
These forward-looking statements may be identified by the fact they
use words such as “should,” “expect,” “anticipate,” “estimate,”
“target,” “may,” “project,” “guidance,” “intend,” “plan,” “believe”
and other words and terms of similar meaning and expression. Such
statements are likely to relate to, among other things, a
discussion of goals, plans and projections regarding financial
position, results of operations, cash flows, market position,
product development, product approvals, sales efforts, expenses,
capital expenditures, performance or results of current and
anticipated products and the outcome of contingencies such as legal
proceedings and financial results. Forward-looking statements can
also be identified by the fact that they do not relate strictly to
historical or current facts. Such forward-looking statements are
based on current expectations that involve inherent risks,
uncertainties and assumptions that may cause actual results to
differ materially from expectations as of the date of this news
release. These risks include, but are not limited to: (1) the
ability to sustain brand strength, particularly the Enfa family of
brands; (2) the effect on the company’s reputation of real or
perceived quality issues; (3) the effect of regulatory restrictions
related to the company’s products; (4) the adverse effect of
commodity costs; (5) increased competition from branded, private
label, store and economy-branded products; (6) the effect of an
economic downturn on consumers’ purchasing behavior and customers’
ability to pay for product; (7) inventory reductions by customers;
(8) the adverse effect of changes in foreign currency exchange
rates; (9) the effect of changes in economic, political and social
conditions in the markets where we operate; (10) changing consumer
preferences; (11) the possibility of changes in the WIC(2) program,
or participation in WIC; (12) legislative, regulatory or judicial
action that may adversely affect the company’s ability to advertise
its products, maintain product margins, or negatively impact the
company’s reputation or result in fines or penalties that decrease
earnings; and (13) the ability to develop and market new,
innovative products. For additional information regarding these and
other factors, see the company’s filings with the United States
Securities and Exchange Commission (the “SEC”), including its most
recent Annual Report on Form 10-K, which filings are available upon
request from the SEC or at www.meadjohnson.com. The company
cautions readers not to place undue reliance on any forward-looking
statements, which speak only as of the date made. The company
undertakes no obligation to publicly update any forward-looking
statement, whether as a result of new information, future events or
otherwise.
About Mead Johnson
Mead Johnson, a global leader in pediatric nutrition, develops,
manufactures, markets and distributes more than 70 products in over
50 markets worldwide. The company’s mission is to nourish the
world’s children for the best start in life. The Mead Johnson name
has been associated with science-based pediatric nutrition products
for over 100 years. The company’s “Enfa” family of brands,
including Enfamil® infant formula, is the world’s leading brand
franchise in pediatric nutrition. For more information, go to
www.meadjohnson.com.
MEAD JOHNSON NUTRITION COMPANY
SUPPLEMENTAL FINANCIAL
INFORMATION
(Dollars in millions)
(PRELIMINARY AND UNAUDITED)
This news release contains non-GAAP financial measures,
which may include non-GAAP net sales and earnings and earnings per
share information. The items included in GAAP measures, but
excluded for the purpose of determining the above listed non-GAAP
financial measures, include significant income/expenses not
indicative of underlying operating results, including the related
tax effect. The above listed non-GAAP measures represent an
indication of the company’s underlying operating results and are
intended to enhance an investor’s overall understanding of the
company’s financial performance. In addition, this information is
among the primary indicators the company uses as a basis for
evaluating company performance, setting incentive compensation
targets and planning and forecasting of future periods. This
information is not intended to be considered in isolation or as a
substitute for financial measures prepared in accordance with GAAP.
Tables that reconcile non-GAAP to GAAP disclosure follow.
Constant Net Sales, in
millions Q2 2015 Q2 2014
Reported Dollar Volume
Price/Mix Exchange Net Sales $ 1,032.4 $
1,111.1 (7 %) (3 %) (5 %) 2 % (4 %)
EPS
(earnings per dilutive share) Q2 2015 GAAP $ 0.80
Specified Items (Note 1) $ (0.04 ) Non-GAAP $ 0.76
Note 1: Specified Items include other income of $0.02 and the
tax benefit related to the China investigation accrual of $0.02 and
other immaterial items.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20150714006727/en/
Mead Johnson Nutrition CompanyInvestors:Kathy
MacDonald, (847)
832-2182kathy.macdonald@mjn.comorMedia:Christopher Perille,
(847) 832-2178chris.perille@mjn.com
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