Kettle Chips maker Diamond Foods has recorded a $10.7m loss in the first quarter of 2013 after incurring expenses for an investigation into improper payments to walnut growers.
The company paid $11.8m in expenses during Q1 for an investigation into improper accounting, which dragged its results down.
Market share losses
Diamond’s net sales slumped 10.1% on last year to $258.5 as its main brands Emerald nuts and Kettle lost sales and market share.
Emerald sales were down 16.7% and the brand lost share by 150 basis points, according to data from Nielsen.
Kettle US also lost 40 basis points as sales fell by 11.5% compared to last year. Diamond did however make sales and market share gains for popcorn brand Pop Secret.
The firm, which came close to buying Pringles in 2011 before Kellogg stepped-in, plans a strategy shift under new management.
Ex Hostess Brands chief Brian J. Driscoll was appointed as Diamond CEO in May this year after the former CEO Michael Mendes was removed following the accounting fiasco.
Kettle Chips return to premium pricing
Driscoll said after yesterday’s figures were announced: "Our first quarter results reflect some progress against our new brand strategies, but we continue to face headwinds with respect to walnut supply and a highly leveraged balance sheet.”
"Reduced promotional spending on our snack brands and a shift in the timing of advertising spending to later in the year were the largest contributors to improvement in our margins in the first quarter,” he continued.
The company’s advertising spend was down from $12m to $9m for the quarter due to a shift in its advertising program, it said.