By Padraic Halpin
DUBLIN (Reuters) – Shares in nutrition supplement maker Glanbia slid by 15% on Wednesday after it warned that it expects earnings to fall by up to 11% this year, hit by a longer than expected rise in the cost of whey, a key raw material.
The Irish company also announced that it will sell its underperforming U.S. weight management brand SlimFast as part of a wider plan targeting annual cost savings of at least $50 million by 2027.
Glanbia reported a 6.8% increase in full-year adjusted earnings per share (EPS) to 140.03 cents, in line with its guidance, allowing it to increase total dividends for 2024 by 10% and approve a further 100 million euros of share buybacks.
However, it forecast that EPS would fall to between 124 and 130 cents this year, driven by a $200 million increase in the cost of producing its performance nutrition products, cutting the division’s profit margin to 13-14% from 16.9% in 2024.
The company said that peak whey prices are now predicted to continue into the second half of 2025, having previously expected them to begin to fall in the second half.
Finance chief Mark Garvey said Glanbia now expects whey costs to turn at the end of 2025 and into 2026 as supply increases.
“What it actually means is the peak cost we’re going to see now in high-end whey in 2025 will be 20% higher than the peak cost we saw post-COVID,” Garvey said.
Glanbia took a non-cash impairment charge of $91.4 million in its 2024 results to reflect SlimFast’s performance challenges and the decision to begin the sale process. SlimFast represented 7% of its performance nutrition division at the end of June.
The U.S.-focused company bought SlimFast for $350 million in 2018, but sales of its products have plummeted since 2022 as weight-loss drugs upended the diet market and consumers moved away from the low-carbohydrate diets that the 50-year-old brand supports.
(Reporting by Padraic Halpin; Editing by David Goodman)
