Packaging manufacturer Berry Global has announced a 6% decline in net sales to $3.07bn for the second quarter (Q2) of financial year 2024 (FY24), compared to $3.28bn in the same period in FY23.
The company attributed the downturn to a 5% negative impact from the pass-through of lower resin prices and a 2% decline in volumes.
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The company’s operating income for the quarter also saw a decrease, falling to $208m from $301m year-on-year.
The reduction was largely due to goodwill write-offs in the company’s consumer packaging international segment, an unfavourable volume impact, and a negative price-cost spread from the timing of resin cost pass-throughs.
Berry’s earnings per share (EPS) for Q2 FY24 decreased to $0.98, from $1.42 in the prior year.
Internationally, the company’s consumer packaging division experienced a 9% drop in net sales to $968m while its operating income plummeted to $3m.
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By GlobalDataIn North America, its consumer packaging net sales decreased by 3% to $751m, driven by a 3% volume decline, and operating income decreased to $77m.
In the year-to-date, Berry’s net sales decreased to $5.92bn from $6.34bn a year ago, with EPS falling to $1.48 from $2.27 in FY23.
Looking ahead to the full FY24, Berry forecasts an adjusted EPS range of $7.35-$7.85 and anticipates generating a cash flow from operations between $1.35bn and $1.45bn.
Berry CEO Kevin Kwilinski said: “Berry once again produced solid financial results, consistent with our expectations. Our teams executed well, offsetting an extended period of sluggish macroeconomic demand along with persistent inflation in our primary raw material to start fiscal 2024.
“We undertook additional structural enhancements across our businesses and increased our original cost savings target of $140m to $165m.
“We continue to expect a $55m contribution from the programme in fiscal 2024 with the additional $25m to be realised in fiscal 2025. Moving forward, we remain steadfast in our commitment to prudent management and strategic advancement.”
