Premier Foods lifts FY profit outlook after strong Christmas trading

(Sharecast News) - Mr Kipling and Oxo owner Premier Foods lifted its full-year profit outlook on Wednesday after strong Christmas trading. In an update for the 13 weeks to 27 December, the company said third-quarter branded revenue rose 5.2%, an acceleration on the second quarter, with total revenue 4.1% higher.

Grocery branded revenue increased 5.8%, while Street Treats branded revenue was up 3.1%. Premier said it made market share gains in both.

Revenue from New Categories was 29% higher, while international saw a 10% jump, with a strong quarter for Australia in all categories.

Following "a strong trading performance" in its key quarter, Premier Foods now expects trading profit for the FY25/26 financial year to be at the upper end of market expectations of £193m to £198.2m.

Chief executive Alex Whitehouse said the company had "a really good Christmas".

"These results demonstrated strong delivery against all pillars of our strategy, with consumers continuing to choose our brands for their quality and value. Both our Grocery and Sweet Treats businesses made strong progress in the period, and we returned to double-digit revenue growth overseas with particularly good performances in Australia and the US," he said.

"Our product innovation programme is particularly strong this year and consumers are embracing our new ranges including OXO Bone Broth, Paxo Stuffing Wreath, Angel Delight Bubble Jelly and Mr Kipling Cake Bites tubs. Premium ranges such as Ambrosia Deluxe, The Spice Tailor and Mr Kipling Signature Mince Pies again outperformed the market, as consumers traded up over the festive period.

"Sales from New Categories delivered another strong quarter, up 29%, led by the growing success of FUEL10K yogurt and granola. We grew all of our acquired brands double digits, including our most recent acquisition Merchant Gourmet, as we further leverage both our commercial expertise to expand retailer distribution and marketing capabilities to drive product innovation and increase brand investment."

At 1225 GMT, the shares were up 5.5% at 178.56p.

Jefferies, which rates the stock at 'buy', said: "A further upgrade to FY26 profit expectations, even if small, demonstrates the clear disconnect between PFD's strong trading performance and a share price that has fallen 20% from the May peak."