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VIDEORecession Discovers 57 Uses for Heinz
By
Scott Reeves Feb 25, 2009 2:15 pm
Brief scrutiny of today's headlines.
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H.J. Heinz (HNZ) is benefiting from this trend and beat analysts’ earnings estimates for the quarter ended January 28. The company’s earnings rose to $242.3 million, or $0.76 a share, from $218.5 million, or $0.68 a share in the third quarter a year ago. Analysts expected the company to earn $0.65 a share.
Heinz said ketchup sales rose 9%, an impressive performance for the world’s blandest condiment that market gurus once said was threatened by salsa.
But overall, the company said North American sales declined 6% because price hikes couldn’t offset lower-volume sales in frozen food. Heinz’s Smart Ones faced intense competition from Nestle’s Lean Cuisine.
But consumers aren’t staying home every night. In what looks like a case of spending schizophrenia, McDonald’s (MCD) said global sales increased 6.9% in 2008, including a 4% increase in the United States and an 8.5% jump in Europe.
But spiffier chains are hurting in the downturn. Benihana (BNHN) said third-quarter revenue fell 3.7% to $67.2 million compared with $69.8 million for the same period a year ago. The company lost $4 million in the most recent quarter compared with net income of $3.2 million a year ago.
It says something about ketchup that it takes a recession to make it look good. Come to think of it, ketchup makes a mayonnaise sandwich look good.
No positions in stocks mentioned.
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