By Stuart Condie
SYDNEY--Global pallet giant Brambles reaffirmed its annual earnings guidance despite lower September-quarter demand from existing U.S. customers.
The Australia-listed company, which reports in U.S. dollars, on Thursday reported first-quarter sales revenue of $1.68 billion, up 3% on a year earlier.
Revenue from its CHEP Americas unit grew 3% to $926.5 million. Like-for-like pallet volumes were flat in the region, although net new business wins lifted total volumes by 1%.
In the U.S., Brambles said that like-for-like volumes fell 1% due to an earlier produce season that had brought forward volumes to the prior quarter.
The U.S. growing season has been inching forward over recent years, according to the U.S. Environmental Protection Agency. The EPA says that the final spring frost has recently been occurring earlier than at any point since 1895.
Brambles said that lower manufacturer and retailer inventory level were also an issue. Net new business wins grew 1%, offsetting the decline from existing customers, Brambles added.
"While our sales revenue performance in the first quarter was slightly below the full-year guidance range, we expect ongoing price realization and improved volume growth through the balance of the year," Chief Executive Graham Chipchase said.
Stripping out the impact of currency moves, 1Q CHEP Americas revenue grew 5% on a year earlier. The largest driver was a 4% rise in prices, driven primarily by increases in the prior fiscal year.
Europe, Middle East and Africa sales revenue grew 3%, or 1% after accounting for currency moves. Asia-Pacific revenue rose 4%, but was flat in constant-currency terms.
Brambles still expects annual revenue to rise by 4-6% on a constant-currency basis. It expects underlying profit to grow by 8-11% on the same basis, with positive free cashflow before dividends of $750 million-$850 million.
Write to Stuart Condie at stuart.condie@wsj.com
(END) Dow Jones Newswires
October 23, 2024 18:07 ET (22:07 GMT)
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