Mead Johnson's Sales Slide 7% on Currency Headwinds, Struggles in Asia--Update

   By Ezequiel Minaya 
 

Mead Johnson Nutrition Co. on Thursday said revenue slid 7% in the second quarter as the strong U.S. dollar impacted sales overseas and the company stumbled in China.

"While we are pleased with our strong performance in North America and Europe, we are determined to improve performance in specific Asian and Latin American markets," said Kasper Jakobsen, chief executive of the Chicago-based company, who noted that the company was also "disappointed with our overall sales in China."

The baby-formula maker has grappled with the Chinese market, having faced an antitrust probe in the country and concerns over formula safety. Mead Johnson also saw disruptions in Hong Kong sales, likely linked to protests there.

More recently, shoppers in China have increasingly purchased their formula through the import section of e-commerce sites or through shopping agencies that help consumers import products from abroad. Experts say these new avenues have thrown open the doors to competition, leading companies like Mead to face off with a larger number of formula makers, weighing on sales targets.

For the quarter, Mead Johnson reported a profit of $162.9 million, or 80 cents a share, compared with $171.4 million, or 84 cents, a year earlier. On an adjusted basis the company posted per share earnings of 76 cents.

Revenue fell 7.1% to $1.03 billion from $1.11 billion during the same period a year ago.

The company had said it expected per-share earnings of 76 cents on revenue of $1.03 billion.

Earlier this month, the company cut its full-year outlook, citing weak sales during the second quarter. For the year, Mead Johnson, known for its Enfamil formula, said it expected an adjusted per-share profit of $3.63 to $3.78 a share, down from an earlier range of $3.90 to $4. Sales are expected to fall 2% to 4% from 2014, the company said, versus an earlier prediction of 2% sales growth this year.

Write to Ezequiel Minaya at [e-mail]

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