Premium Brands Holdings experienced a return to growth in first-quarter volumes in Canada, although performance still fell short due to constraints on consumer spending. The company highlighted the challenging “economic environment” in Canada, which impacted both retail and foodservice channels. Despite this, the first-quarter saw a 2.2% increase in group revenues, primarily driven by the US division of Specialty Foods.
President and CEO George Paleologou noted progress in stabilizing Specialty Foods sales in Canada, with organic volume growth of 1.1%. He also mentioned positive developments in the lobster business, with a strong start to the first Canadian fishery of 2024. However, lobster supply shortages affected the smaller Premium Food Distribution (PFD) unit, leading to a 1.5% revenue decrease.
Regarding the outlook for the second quarter, the company anticipates a similar performance for PFD, with expectations of growth in the latter half of the year, especially in beef and seafood programs. Furthermore, CFO Will Kalutycz discussed consumer trends, such as trading down to discount banners, which impacted sales. Despite this, a robust Atlantic salmon fishery boosted revenue in the segment.
In terms of consumer environment, there were concerns about menu inflation, particularly in the out-of-home segment. Premium Brands observed price reductions in poultry within the Specialty Foods division, leading to revenue and volume growth. The US market experienced even higher volume gains in proteins, sandwiches, and baked goods.
Kalutycz highlighted the success of passing on poultry price savings to customers to drive volume growth. Looking ahead, the company aims to continue this strategy to maintain momentum. Overall, Premium Brands remains optimistic about the future and is focused on navigating the challenges posed by the current market conditions.
