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The Wm. Wrigley Jr. Co. saw full-year 2007 net sales climb 15 percent from the prior year to a new record of nearly $5.4 billion.
"In a year of rising costs and competition, we delivered against our long-term goal of 9 to 11 percent earnings per share growth for the eighth consecutive year," commented Bill Perez, president and CEO. "In fact, we pushed the high end of that range, while at the same time, improving the overall shape of our financial results, with higher gross margins, lower relative operating expenses, and sharply increased brand support."
Sales increases were primarily driven by a combination of worldwide shipment growth of 6 percent, with pricing gains and the positive impact of currency translation of relatively stronger international currencies to U.S. dollars.
"Crossing $5 billion in sales represents the achievement of an ambitious aspiration we had set for ourselves several years ago," noted Bill Wrigley Jr., executive chairman and chairman of the board.
"More importantly, this growth was accomplished along with the strategic diversification of our brand portfolio and confectionery capabilities, as well as the expansion of our sales infrastructure and the increased efficiency of our supply chain operations. These initiatives have us well-positioned to continue capturing opportunities in global confectionery, which remains one of the fastest-growing categories in the food sector."
For the full year, consolidated net sales were $5.39 billion, an increase of $706 million or 15 percent from 2006. Shipment growth and improved price/mix accounted for about two-thirds of the gain, with the remainder coming from the positive impact of currency translation.
However, North America net sales for 2007 were $1.76 billion, essentially flat to 2006 on a 7-percent decline in volume, as sales gains in the first six months of the year were offset by declines in the third and fourth quarters due to lower customer shipments. While there was some negative volume impact due to pricing changes, the larger portion of the second-half decline was due to U.S. trade inventory adjustments. Lower shipments were substantially offset by the positive contribution of the price increases to net sales.
In the fourth quarter, North American net sales were down slightly less than 3 percent versus 2006, as a double-digit increase in price/mix was not enough to fully offset a double-digit shipment decline in U.S. that was primarily due to trade inventory adjustments.
Syndicated data, however, showed a year-over-year increase of 5 percent in consumer retail purchases during the quarter across the company's U.S. portfolio, largely on the growing strength of Wrigley's new 5 brand, as well as notable gains by Orbit.