UST exceeded its earnings expectations for the quarter??


July 28, 2008 - According to Murray S. Kessler, chairman and chief executive officer UST exceeded its earnings expectations for the second quarter 2008. For the second quarter ended June 30, 2008, net sales increased 3 percent to $506.2 million. In the quarter, total moist smokeless tobacco net can volume increased 1.3 percent to 172 million, with premium decreasing 0.3 percent to 143.2 million and price value increasing 9.7 percent to 28.8 million, versus the prior year period. Premium volume trend softened in June, primarily in one region of the country - checking on this TW. We attribute this to increased competitive activity, our own promotional timing and higher gasoline prices. Plans have been adjusted to address these issues in order to return USSTC's premium volume to growth as the year progresses. The company is increasing promotional support in the second half of 2008 to address premium smokeless tobacco volume trends in specific areas of the country most impacted by current economic headwinds and competitive activity. (UST Reports Second Quarter 2008 Results; Reaffirms Earnings Guidance for the YearYahoo Finance, 7/24/2008.)

From the article entitled UST Isn't Up to Snuff by Charles L. Norton, RealMoney.com Contributor, 4/11/2008. The moist snuff category is divided into high-priced, premium brands and inexpensive brands in the price-value segment. The real growth is coming from the discount brands. For example, overall moist snuff volumes grew about 7% in 2007. UST's can volume, led by its pricey Copenhagen and Skoal brands, trailed behind at only 3.1%. Meanwhile, the total low-price segment grew by double digits. UST has had significant losses in market share to rivals like No. 2 player Conwood, a unit of Reynolds American (RAI - commentary - Cramer's Take), which is focused on the price-value segment with its low-cost Grizzly brand. Ten years ago, UST owned more than 80% of the smokeless tobacco market. By late 2004, the company's market share had slipped to 68%. Today, it's less than 60% and trending down.

1 comments:

  kevinowns

July 24, 2020 at 1:17 AM

This blog is really helpful to deliver updated educational affairs over internet which is really appraisable. I found one successful example of this truth through this blog. I am going to use such information now.Swedishsnus