Hormel Foods has announced it is to close a CytoSport manufacturing facility in Benicia, California.
On a call discussing its second-quarter results, Hormel chairman, president and CEO Jeffrey Ettinger said the site will close in June. The company will be moving production to its Century Foods plant in Wisconsin and to a third-party facility near Benicia.
Go deeper with GlobalData
The company said it incurred a US$4.5m charge during the second quarter of fiscal 2015 in relation to the planned closure. No reason was given for the move.
Hormel acquired CytoSport last August. Asked about the performance of the Muscle Milk maker in this financial year, Ettinger said: "The first quarter was probably slightly behind. The second quarter, if you look at operating results, we were very happy with the results. They did have the additional $4m-plus charge as we made the decision to close the Benicia plant. Over time, that should enhance operating returns."
Ettinger said Hormel was adding listings of Muscle Milk and had seen "gains in the club, food, drug and mass and convenience channels this quarter".
Ettinger added Hormel was still "comfortable" with its prediction CytoSport would add $0.05 to its earnings per share in the company's current financial year.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataOfficials at Hormel had not returned a request for further comment at the time of publication.
