SAN FRANCISCO (AP) — Food maker Del Monte Corp., which was bought by private investors in March, said Friday that it lost $27.6 million in the most recent quarter as revenue fell and its new owners worked through expenses related to the purchase.
Spending more on marketing for new products also weighed on Del Monte's profit, while higher prices and sales of new products gave it a boost.
In its fiscal first quarter a year ago, the company recorded net income of $59.4 million.
Kohlberg Kravis Roberts & Co., Vestar Capital Partners and Centerview Partners bought Del Monte in March for $5.3 billion and agreed to take on the company's debt. Del Monte said Friday that its total net debt stood at $3.8 billion as of July 31.
Revenue in the first quarter, which covered May through July, fell 3.5 percent to $776 million as customers bought less overall from Del Monte.
Del Monte, like other companies, is paying more for many ingredients and has raised prices to compensate, and that helped some. But it also has to be careful not to raise prices too much or it will drive away customers.
Del Monte is best known for canned vegetables and snacks and for pet foods like Meow Mix and Milk-Bone. Revenue from pet products, which made up about 54 percent of total revenue, fell 1.2 percent. Revenue from consumer products fell 6.1 percent.
Dave West, the former Hershey Co. CEO who took the helm of Del Monte last month, said he expected short-term challenges from the rising costs of materials and consumers' wariness. He said stabilizing costs, launching new products and taking marketing and productivity measures would position Del Monte for "long-term health and growth."
