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Investing.com - Nomad Foods Limited (NYSE:NOMD) saw its shares rise 3.7% on Thursday after the frozen food company reported first quarter earnings that missed analyst estimates and lowered its full-year outlook.
The company reported adjusted earnings per share of €0.35 for Q1 2025, €0.01 below the consensus estimate of €0.36. Revenue came in at €760 million, falling short of analysts’ expectations of €796.39 million and declining 3% YoY.
Organic revenue decreased 3.6% due to a 3.7% volume decline.
Despite the earnings miss, investors appeared to focus on Nomad’s gross margin expansion and increased marketing investments.
Gross margin improved 90 basis points to 27.8%, which the company said helped fund a double-digit increase in advertising and promotion spending.
CEO Stéfan Descheemaeker cited larger than expected retailer inventory destocking and Easter timing as key factors behind the revenue decline. He noted slightly positive in-market consumption growth but said top-line growth is expected to accelerate throughout the remainder of the year.
"Our team continued to execute well against our strategic priorities in the first quarter," Descheemaeker stated. "Our organization delivered another quarter of strong gross margin improvement while continuing to scale our Growth Platforms, strengthen our innovation pipeline and reinvest in our leading brands."
Nomad Foods lowered its full-year 2025 guidance, now expecting organic revenue growth of 0-2%, down from 1-3% previously.
The company also reduced its adjusted EBITDA growth forecast to 0-2% from 2-4% and widened its adjusted EPS range to €1.82-€1.89.
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