Wrigley's profits up but shy of expectations

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Wrigley has announced sales and profit gains for the full financial
year 2003, but the results were below analysts expectations.

The Chicago-based company said quarterly net profit rose to $109.9 million (€87.9m), or 49 cents per share, from $107.8 million, or 48 cents per share, a year ago - four cents shy of analysts expectations - while operating profits were up 11 per cent. Global sales managed to cross the $3 billion mark, up 12 per cent on the previous year. The company said that the increase reflected a 6 per cent sales gain in the Americas driven by an increase in shipments and positive mix, including higher sales of Orbit in the US and Juicy Fruit pellet products in the US and Canada.

International net sales increased by 16 per cent as a result of favourable currency translation, overall growth in volume and selected selling price increases. Strong shipments across Europe more than offset the slightly lower shipments in Asia resulting from the impact of the SARS crisis. On a currency neutral basis, the full-year sales gain for the Americas and International would have been 5 per cent and 6 per cent respectively. For the twelve months, worldwide shipment volume was up 4 per cent, the company said.

Wrigley's​ fourth quarter company sales were $821 million, up $82 million or 11 per cent on a shipment volume increase of 4 per cent. Quarterly sales increases of 5 per cent in the Americas and 15 per cent in International regions, principally Europe, were due primarily to volume gains and the benefit of currency translation.

However, despite share prices not meeting expectations, gross profit margins for the quarter and the full year increased 140 and 50 basis points respectively, to a very respectable 58 per cent and 58.4 per cent. The company said that this was due to slightly lower product costs and selected selling price increases.

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