WhiteWave Foods Co. (WWAV) released fourth-quarter and full-year 2015 financial results on February 11, reporting another quarter and year of double-digit sales and profit growth. Here's a closer look at the company's financial performance, as well as the outlook for 2016 and beyond. 

The numbers 

For the full year:

Revenue $3,866 $3,437 12.5%
Net income $168 $140 20%
Operating income $332 $267 24.3%
EPS $0.94 $0.79 19%

Amounts (except EPS) in millions. Source: WhiteWave Foods release.

Fourth quarter:

MetricQ4 2015Q4 2014Change
Revenue $1,028.0 $911 12.8%
Net income $48 $33 45.5%
Operating income $92 $72 27.8%
EPS $0.26 $0.18 44.4%

Amounts (except EPS) in millions. Source: WhiteWave Foods release.

As we did last quarter, let's compare WhiteWave's quarterly earnings to those of fellow healthy packaged-foods peer Hain Celestial Group Inc (HAIN 2.60%), which reported its second quarter for fiscal 2016 recently (note: Hain's fiscal Q2 is the same calendar quarter as WhiteWave's fiscal Q4):

MetricQ2 2016Q2 2015Change
Revenue $752.6 $696 8.1%
Net income $56.9 $44.6 27.6%
Operating income $87.7 $74.0 18.5%
EPS $0.55 $0.43 27.9%

Amounts (except EPS) in millions. Source: Hain Celestial release. 

These are two of the fastest-growing companies operating in the healthy packaged-foods space, while traditional packaged-foods companies are seeing the market shares of their legacy brands get squeezed, and revenues decline. Here's a look at the most-recent quarter reported by General Mills (GIS 1.05%):

MetricQ2 2016Q2 2015Change
Revenue $4,425 $4,712 -6%
Net income $543.6 $255.4 112.8%
Operating income $905.7 $559.0 62%
EPS $0.87 $0.56 55%

Amounts (except EPS) in millions. Source: General Mills release. 

General Mills' earnings were up significantly from the year-before period. This primarily is because of much higher one-time restructuring and impairment costs in 2014, which reduced GAAP earnings that year, and the nearly $200 million gain on the sale of Green Giant that General Mills recognized in the quarter. When factoring out the gain on the Green Giant sale, and one-time costs, earnings were relatively flat.

At the same time, WhiteWave -- and to a lesser extent, Hain Celestial (which is working through challenges of its own in North America) -- is taking advantage of growing consumer demand for more natural and organic products, alternatives to traditional dairy, and even outright eschewing bigger, well-established brands. 

What happened in 2015

  • Organic (i.e., brands owned for more than one year) sales increased nearly 10% on a constant-currency basis.
  • Excluding investments in a China joint venture, adjusted earnings per share increased 31%. 
  • Recorded second consecutive quarter of $1 billion-plus revenue. 
  • Sales of plant-based foods and beverages, including dairy alternatives such as Silk, increased 29% in 2015.
    • Vega (acquired in August 2015) revenues increased 50% from 2014, and was a key driver in the category. 
  • Americas fresh-foods segment saw net sales fall 5%. This was primarily due to ongoing issues with implementation of SAP software at the segment, causing higher losses and problems meeting customer demand. 
    • Management said that the category (primarily packaged salads) grew 9% in 2015, and expects to position the company to grow moving forward.
  • Europe continues to be a source of growth, with net sales up 17% before currency exchange. With foreign exchange impact, sales were up 6% in the quarter. 
  • The company added to its debt load, increasing its senior secured debt by $520 million. The company then used those proceeds to pay down its revolving credit facility by the same amount. 
    • Management said that the move would not only free up the $520 million on the revolver for other purposes, giving the company financial flexibility, but would also lower interest rates and fees. 
  • Promoted Blaine McPeak to Chief Operating Officer (which position, prior to this, the company did not have at all), and also promoted Kevin Yost to U.S. Group President, Americas foods and beverages business segment.

Outlook for 2016: More steady, strong growth 
WhiteWave management is expecting similar growth in 2016 as it experienced last year. Organic growth is forecast at high single-digit rates, with net sales, including recent acquisitions, to increase 10%-11% on a reported basis, and slightly higher on a constant-currency basis. Operating income is expected to grow slightly ahead of sales in the mid- to high-teens, as the benefits of integrating acquisitions into the company add to the bottom line. 

At the same time, WhiteWave will continue to invest in its Chinese joint venture, building up scale in that business. In 2015, investments in this joint venture cost roughly $0.07 per share, with the company reporting earnings per share of $1.12, and $1.19 when China JV investments were excluded.

WhiteWave guidance for 2016 adjusted earnings per share is between $1.33-$1.37, excluding the $0.05-$0.06 per share the company plans to invest in China.

Looking ahead: Don't confuse market sell-off for poor business performance 
So far in 2016, WhiteWave's stock has taken a beating, like almost every growth stock out there. As of this writing, shares are down 16% this year.

But at the same time, the company's performance has been solid, with double-digit sales growth powered by its core brands as much as by acquisitions. At the same time, steadily improving operating results are driving higher profits. Furthermore, the company also operates in the segments of the packaged-foods industry that are seeing the fastest growth in consumer demand, and are often being driven by consumers looking for alternatives to the traditional packaged-food brands. 

There's no clear answer to when the market will turn, but if WhiteWave's management continues to execute on growth and operations like they have in recent years, investors in the company who ride out the market's current downturn will probably do very well.