(Bloomberg) -- Dean Foods Co., the biggest U.S. milk processor, is blaming water for some of its earnings miss.
The Dallas-based company, which replaced its chief executive officer weeks ago and has been exploring “strategic options” for months, fell as much as 34% after reporting a wider-than-expected second-quarter loss. Its bonds also fell to record lows.
One of the reasons for the miss?
“The recent category trends we're seeing are really a shift in how consumers are shopping and what they're buying,” Chief Financial Officer Jody Macedonio said on a conference call Tuesday. “Particularly in Q2, we saw some of the volume shift to waters.”
Declining milk consumption is a trend that has helped deliver four consecutive quarters of losses for Dean. Competition is coming from all sides, with alternatives like almond milk eating into market share and retailers including Walmart Inc. opting to process their own milk.
“The category is shrinking in total, everyone is going for a smaller pie,” Macedonio said.
To contact the reporter on this story: Lydia Mulvany in Chicago at lmulvany2@bloomberg.net
To contact the editors responsible for this story: James Attwood at jattwood3@bloomberg.net, Tina Davis, Patrick McKiernan
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