Goodman Fielder could see its 2009 profit fall as much as 23% as consumers shift to cheaper products and as margins fall.
Goodman Fielder’s Australian shares shed as much as 17% to $1.16 and its NZ stock dropped as much as 10.6% to NZ$1.60 as both broader markets rose .
The company said it expects full-year profit of between $170 million and $185 million, down from profit before one-time items of $220.7 million in 2008 and well below its November forecast of between $191 million and 204 million.
“The continuing severe economic conditions have caused an erosion of consumer confidence and this has resulted in a drift to cheaper alternatives such as house brand products,” said the company in a statement.
Analysts, on average had been expecting Goodman Fielder to report a full year net profit before one-time items of $191 million, according to Reuters Estimates.
The company, whose brands include Helga’s bread, Meadow Lea margarine and Pampas pastry, reported a first half net profit fall of 21.9% to $73.9 million. However, it said it expected improved trading conditions in the second half and further improvement in full year 2010.