Heinz to raise profit forecasts - Wall St Journal
NEW YORK May 29 (Reuters) - The H.J. Heinz Co HNZ.N is expected to raise its profit- and sales-growth forecasts as the company unveils its first two-year plan since a proxy fight with activist investor Nelson Peltz in 2006, the Wall Street Journal reported on Thursday.
The Pittsburgh-based ketchup giant will report results for the fiscal year ended April 30 at an investor meeting later on Thursday in New York.
The report cited people close to the company as saying it is expected to increase its sales-growth outlook for the next two years to 6 percent or more from 4 percent, and its earnings-per-share growth forecast for the same period to between 8 percent and 11 percent from the previous projection of 7 percent to 9 percent.
The growth is expected to come from new products, higher prices for existing products and an accelerating push into emerging markets, the Journal said.
The company had been struggling when Peltz launched his proxy fight two years ago. He won board seats for himself and an ally after acquiring a stake of about 6 percent through his hedge-fund firm, Trian Fund Management LP. He called on Heinz to cut costs and increase marketing spending.
Peltz declined to comment on the company's latest plans, the Journal said.
In the past fiscal year, sales in emerging markets such as China, India and Indonesia grew 20 percent. The company's emerging-markets business is expected to account for 20 percent of total revenue in the next three to four years, up from 13 percent now.
Heinz is expected to introduce more than 400 new products in the next two years, including new Smart Ones low-fat frozen main dishes, vitamin-fortified sauces, and spicier ketchup aimed at baby boomers, the newspaper said.
The company also plans to expand its line of Weight Watchers items and launch a new Ore-Ida product called Steamn'Mash, packages of peeled and diced potatoes that consumers can microwave and then mash.
The company is expected to increase its marketing spending by as much as 10 percent over the next two years, the Journal said. (Reporting by Steve James; Editing by Kim Coghill)
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