Dean Foods'
If you look at the numbers, though, you see that the news isn't that bad for Dean Foods, especially compared with last year's Q2 results. Revenue was up 9.1% for this quarter with a cost of goods sold increase of only 9.6% -- not bad considering the rampant, across-the-board commodity inflation plaguing food producers.
Core milk volume increased by only 1.1%, with the additional revenue gain attributed to the pass-through of commodity costs. WhiteWave-Morningstar -- the organic and soy milk segment -- registered a net sales increase of 10%, with Horizon Organic milk alone delivering a revenue bump of 30%. Compared with last year's dairy revenue gain of 16% and raw-milk expense increase of 48%, it's no wonder that Dean is trumpeting its 10% quarterly adjusted growth in earnings per share.
Hershey
Like last year, Dean is advising investors that inflation and price competition will continue to affect results. The company has admitted that although its organic milk sales have risen considerably, price increases in raw milk are eating into profits. A key factor in Dean's continued growth is whether organic milk -- or even Dean's standard milk products -- will become a luxury in a struggling economy.
With so much uncertainty, it looks as though Dean's stock price will continue to fluctuate in the same way that the market has been lately.
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