This post is part of a series of posts called “Company Notes.” These posts contain quotes and exhibits from earnings calls, conference presentations, analyst days and SEC filings. Full transcripts can be found at Seeking Alpha
Expecting flat to slightly down 4Q
“implies a flat to slightly down result for the fourth quarter based on several factors. First, we’re supporting our brands and plan to increase our marketing support by at least $11 million from the fourth quarter of 2013. Second, we expect the growth of our international businesses to outpace the increase in the U.S. Although this puts pressure on operating income, it creates a favorable tax rate.
And third, we’re cautious about the near-term demand from quick-service restaurants in China and other parts of the Asia Pacific region. ”
Raising EPS guidance though
“Taking into account the new operating income range and the favorable tax rate, we’ve increased our target rate for adjusted EPS to $3.30 to $3.37. Overall, we believe this guidance will deliver strong 2014 financial performance.”
Planning increased TV spend
“nother action under way to strengthen our U.S. brand equity is increased investment in brand marketing, and we’re planning an increase of approximately 20% in the 4th quarter. These additional funds will boost our holiday campaigns with new television ads for Thanksgiving and Christmas. We’ll build awareness in trial of the new skillet sauces and gluten-free recipe mixes, we’ll drive our quality message, and we’re supporting the Zatarain’s brand.”
Issues at Chinese QSRs again
” as you’ve probably seen from our QSR customers, a report about a supply issue, which has impacted foot traffic again.
We still that business as being pretty resilient over time, and the Chinese consumers tend to come back, but when they have this well-publicized quality issues in the store it erodes confidence and impact short-term traffic. And we’re seeing some of that like our customers have reported”
Private label growth has actually been flattening recently
” So, what we’ve actually seen in the more recent period and actually for the year, private label share in spices has not grown in the U.S. It’s been pretty flat. And in more recent periods, we’ve seen private label share flattening and actually declining a little bit.”
There’s going to be some downward pressure in 4Q but we haven’t quantified it yet
“Well, certainly, there’s going to be downward pressure. We haven’t quantified the exact impact in the quarter, but I’d say we’re definitely going to be experiencing downward pressure, and that’s incorporated in the full year guidance that we’ve given you”