H.J. Heinz Co. chief executive officer William Johnson has gone on the offensive against activist investor Nelson Peltz.
According to the Financial Times, Johnson acknowledged that shareholder returns have faltered at the food giant, but he asserted that prospects look much more promising. “Rest assured, we’ll work this plan relentlessly,” he said on a conference call following the release of the company’s quarterly results. “Our performance in recent years has put us in the middle tier of the food group, and nobody is more committed than I am to dramatically improve total value.”
Heinz missed Wall Street numbers on Tuesday, reporting a 23 percent earnings drop in the third quarter. However, “at least part of the apparent miss was due to the sale of businesses in Europe, as Heinz streamlines its operations there — a plan that we like,” wrote Bank of America analyst Edgar Roesch in a research note, according to Reuters.
Peltz — chairman and CEO of Triarc Companies Inc., which through subsidiaries franchises the Arby’s restaurant system in the United States and Canada — recently clamored for changes at Wendy’s, too, according to the FT. Reportedly, he has not yet decided whether to challenge the Heinz board.
In a statement accompanying his company’s earnings release, Johnson maintained that “Heinz set a very ambitious agenda this year as part of its strategy for growth to further focus this company on its core categories and geographies, reduce management layers and overhead, and position the company for more consistent growth in its big brands…. We posted solid results for the quarter, with volume growth of almost 3 percent, operating income growth of more than 8 percent (excluding special items), and solid operating free cash flow of $58 million.”
Johnson also noted that the company’s top 10 brands, representing nearly 60 percent of total sales, grew 4.4 percent on a constant currency basis.