Pinnacle Foods Inc. PF has been constantly shuffling its board since its IPO in Mar 2013. Another step in this regard is the departure of its Chief Executive Officer (CEO).
On Mar 23, this food company announced that its CEO Robert J. Gamgort will leave Pinnacle at the end of April. He will serve on the company's board until the time of his departure. Pinnacle has started its search for a new CEO. Shares of Pinnacle, which makes Duncan Hines cake mixes and Wish-Bone salad dressings, fell more than 11% on Mar 23.
Gamgort who has been serving the company since 2009 will now assume the role of CEO of Keurig Green Mountain, a leader in single-serve coffee and beverage technologies and will replace its current CEO Brian Kelley, who will become vice chairman of Keurig's board.
Keurig was recently acquired by an investor group led by JAB Holding Co., a private company based in Luxemburg for nearly $14 billion. Keurig now operates independently as a privately owned entity.
Keurig is hiring Pinnacle Foods CEO Robert Gamgort as its next chief executive as it struggles to boost the sales of its single-cup coffee machines. Keurig has been posting weak results and witnessing sluggish growth for quite some time. The company has been facing the brunt of intensifying competition and slower-than-expected adoption of the 2.0 brewing machines, primarily due to confusion regarding compatible brands that can be used with the devices.
Parsippany, NJ-based Pinnacle manufactures a wide variety of pre-packaged foods under multiple brand names. Its products include Duncan Hines cake mix, Mrs. Butterworth's syrup and Vlasic pickles.
The company recently reported fourth quarter 2015 results wherein earnings of 70 cents per share topped the Zacks Consensus Estimate by 1.4% and grew 9.4% from the year-ago quarter led by higher sales, improved gross profit and favorable productivity mix. Sales missed the consensus mark, but increased 2.4% year over year driven by the Gardein acquisition and higher pricing, partially offset by lower volume/mix and unfavorable currency headwinds.
Overall, we are impressed with the company’s strong innovation program, robust acquisition and productivity efficiency. However, higher introductory costs related to innovation, increased consumer marketing investment, input cost inflation and currency headwinds are likely to hurt profits.
Pinnacle Foods has a Zacks Rank #3 (Hold). Better-ranked players in the food industry include Campbell Soup Company CPB, Post Holdings, Inc. POST and Sysco Corp. SYY. While Campbell Soup and Post Holdings sport a Zacks Rank #1 (Strong Buy), Sysco holds a Zacks Rank #2 (Buy).
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