Glanbia shares plunge 7% as it reiterates commitment to SlimFast despite 'drag'

the SlimFast brand is 'certainly dragging us a little bit more than we’d like this year,' said chief financial officer Mark Garvey.

Irish nutrition giant Glanbia shares plunged 7% after its interim statement gave a mixed financial performance for the company so far this year. 

Chief financial officer Mark Garvey suggested company is committed to its SlimFast products under the new leadership of Hugh McGuire following the retirement of Siobhán Talbot last year despite it becoming a dead weight on its Glanbia Nutritional Performance (GPN) division.

“It’s certainly dragging us a little bit more than we’d like this year,” said Mr Garvey.

The pharma industry has gobbled up the weight-loss market, especially in the last year, with blockbuster drugs including Ozempic but Mr Garvey said Glanbia is “committed right now to stabilising" SlimFast, but it continues to focus investment on its popular protein powder products including Optimum Nutrition.

Glanbia posted a marginal drop in overall revenue as price decreases offset volume growth in the first half of 2024 while its Glanbia Nutritionals division suffered a "wobble", according to Mr Garvey, due to volatile dairy pricing. 

Glanbia Group revenue declined $1.82bn (€1.6bn), a fall of 1% on the same period a year earlier.

The drop comes after price reductions were implemented and some promotional activity took place following a period of some price hikes in an inflationary environment.

The company also reported profits fell to $143m in the first six months compared to $193m on a constant currency basis a year earlier.

Mr Garvey noted that Glanbia ramped up promotional activity in the first six months but wasn’t as aggressive as some of its competitors, especially in Europe. He said that going into the second half of the year promotional deals will be a lot more “disciplined.” 

Glanbia also posted a 13% jump in earnings before the deduction of interest, tax, depreciation, amortisation and exceptional items to almost $262m, underpinned by sustained demand for its flagship protein powder product.

Optimum Nutrition, which represents 65% of GPN revenue, delivered revenue growth of 7.7% driven by volume growth of 12% which was impacted by negative pricing.

Mr McGuire was optimistic on his outlook for the firm and reiterated full year guidance of 5% to 8% growth in adjusted earnings per share.