NEW YORK/CHICAGO – Dean Foods Co reported weaker-than-expected second-quarter sales and forecast earnings for the third quarter that could miss Wall Street estimates, sending the company's shares down 9 percent.
The largest U.S. dairy company said milk prices continue to be under pressure as retailers cut prices on their store brands, sacrificing profits on milk in order to attract customers who will also buy other items.
"Consumers, particularly working-class consumers, remain underemployed and overleveraged," said Gregg Engles, Dean chief executive officer. "Their economic anxiety is reflected in a highly promotional retail environment for private label milk."
The company has seen signs of some retailers moving away from the low-price milk strategy, but not major retailers, Dean executives said during a conference call with analysts.
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