Wm. Wrigley Jr.
While sales increased 14%, to $1.38 billion, foreign currency translation accounted for about one-third of the growth. Essentially, the weak dollar helped boost sales when translating foreign currencies back into dollars for financial reporting. This has nothing to do with stellar operations, but is merely an accounting gain. Still, volumes increased 8% worldwide.
Meanwhile, sales in North America rose just 3%. Volumes, however, declined 1% due to an increase in prices. The company's Altoids brand, purchased in 2005 from Kraft
Wrigley has tempered expectations for the rest of the year. It expects full-year earnings to grow 9% to 11%; still respectable, but a far cry from this quarter. The company has begun shipping its new "5" brand of sugarless gum. The official launch is August, but look for margins to get squeezed as Wrigley spends more on marketing.
There is nothing wrong with 10% annual growth. But this is definitely a slowdown from the first half, and, with a trailing P/E of 29, Wrigley is priced for higher growth. Despite a decent 2% dividend yield, investors may find the stock a little much to chew on right now.
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Fool contributor Larry Rothman is happy to receive feedback, and promises to read it when not being wrestled by his three children. He doesn't have any positions in the companies mentioned.