Shares in nutrition supplement maker Glanbia jumped over 12% today after analysts pointed to a "better than feared" first quarter performance that allowed the Irish group to maintain its full year earnings guidance.
Glanbia shares plummeted to a near two-year low in February when it forecast that earnings could fall by up to 11% this year due to a prolonged rise in the cost of whey - a key ingredient in the protein powders and shakes popular with gym goers.
In a trading statement today, it said today that while whey prices remain elevated, they had come off their peak and it had bought enough to see it through to the fourth quarter and retain its full year margin expectations for its performance nutrition business.
While first quarter group revenue grew by 7.2% year-on-year, performance nutrition fell 6.6% with its large Optimum Nutrition protein powder brand down 3.1% due to lower sales in US fitness clubs that Glanbia had flagged in advance.
Analysts at Davy Stockbrokers had expected Optimum Nutrition sales to fall by 14% in the quarter and Goodbody Stockbrokers said the overall outcome was "better than feared."
The analysts were also encouraged by a 0.4% increase in US consumption of Optimum Nutrition. Glanbia CEO Hugh McGuire said while he was very aware consumer confidence was falling in the US, protein products remain a resilient category.
Glanbia also said it had largely mitigated its exposure to tariffs through price increases and plans to sell US manufactured products earmarked for China into alternative markets.
Today's shares gains trimmed Glanbia's the year-to-date loss to 16.7%. Goodbody said a fuller recovery was unlikely until sustained improvement is seen at half year.
Asked on an analyst call about activist investor Clearway Capital's call for a break up of the company, McGuire said Glanbia would listen to all shareholder proposals and that there were "no sacred cows" as it looks to continuously create value.
McGuire added that the planned sale of its underperforming US weight management brand SlimFast is at the early stages. In February, Glanbia said it would sell SlimFast as part of a wider plan targeting annual cost savings of at least $50m by 2027.
In today's trading statement for the three months to April 5 and ahead of its AGM in Naas in Co Kildare today, Glanbia said its group performance was "resilient" and in line with expectations.
Glanbia said today that the impacts of currently known direct tariffs have been largely mitigated.
Based on the current market environment and expectations for the remainder of the year, Glanbia today reiterated its guidance and said it expects to deliver adjusted earnings per share in the range of 124 cent to 130 cent, a decrease of 11% to 7% on a constant currency basis.
Glanbia also said its Dairy Nutrition division saw revenue growth of 18.9%, mainly as a result of good demand for protein solutions and strong dairy market pricing.
Hugh McGuire, Glanbia's chief executive, said the company delivered a resilient performance during the first quarter while navigating macroeconomic volatility and short-term headwinds in its Performance Nutrition division.
"Our Health & Nutrition and Dairy Nutrition segments delivered a strong performance. As previously announced, Performance Nutrition is facing short-term challenges in the US club channel and we are offsetting this by delivering good growth in our online and food, drug and mass channels and international markets, which is supported by a strong innovation pipeline," Mr McGuire said.
He said the company has made good progress on its group-wide transformation programme which is focused on delivering efficiencies, optimising its portfolio and maximising long-term value for shareholders.
"Significant efforts have been made to reduce the impact of input costs on the group. We now have good visibility of costs to the end of the year and we are reiterating our margin expectations for PN," he said.
"With the first quarter having progressed as planned, and whilst noting the ongoing uncertainty in relation to direct tariffs, we are pleased to reiterate our 2025 full year guidance of adjusted EPS2 in the range of 124 cent - 130 cent," he added.
Shares in the company ended higher in Dublin trade today.
Additonal reporting by Glenda Sheridan
