Berry Global Group Inc (BERY) Reports Decline in Net Sales and Operating Income for Fiscal Year 2023
Berry Global Group Inc (NYSE:BERY) experiences a decrease in net sales and operating income for the fiscal year 2023.
Adjusted diluted EPS shows a slight improvement, increasing by 1% compared to the previous fiscal year.
The company remains committed to returning capital to shareholders through dividends and share repurchases.
On November 16, 2023, Berry Global Group Inc (NYSE:BERY) released its 8-K filing, disclosing its financial results for the fourth quarter and the fiscal year ended September 30, 2023. The company reported a decline in net sales and operating income for the fiscal year, while adjusted diluted earnings per share (EPS) saw a marginal increase.
Fiscal Year 2023 Performance Overview
BERRY's net sales for the fiscal year 2023 stood at $12.664 billion, a decrease of 13% compared to $14.495 billion in the previous year. The decline was primarily due to decreased selling prices, which accounted for $856 million, attributed to the pass-through of lower resin costs, a 6% volume decline, and unfavorable foreign currency impacts. Operating income also decreased to $1.079 billion from $1.242 billion in the prior year, influenced by volume declines, increased business integration costs, and higher selling, general, and administrative expenses.
Despite these challenges, BERY managed to report a slight increase in adjusted diluted EPS, which rose to $7.42 from $7.40 in the previous fiscal year. The company attributes this to a favorable impact from price cost spread, partially offset by the factors affecting net sales and operating income.
Segment Performance and Strategic Initiatives
The Consumer Packaging - International segment saw flat net sales, while the North America segment experienced a decline due to softer market demand. The Health, Hygiene, & Specialties segment reported a decrease in net sales and operating income, primarily due to weaker demand in specialty markets. BERY has announced the evaluation of strategic alternatives for this segment to enhance shareholder value.
The Engineered Materials segment also faced a decline in net sales and operating income, with decreased selling prices and volume declines in European industrial markets being the main contributors.
Capital Allocation and Shareholder Returns
BERRY continues to prioritize shareholder returns, with significant cash flows enabling the company to invest in growth, pursue acquisitions, reduce debt, and return capital through dividends and share repurchases. The Board of Directors increased the quarterly cash dividend by 10% to $0.275 per share, with a payment date of December 15, 2023. During the fiscal year 2023, BERY repurchased approximately 9.8 million shares for $601 million.
Financial Statements Highlights
The condensed consolidated balance sheets show a slight decrease in total assets from $16.956 billion to $16.587 billion. Cash and cash equivalents decreased from $1.410 billion to $1.203 billion. The company's debt levels saw a modest reduction, with current and long-term debt decreasing from $9.255 billion to $8.980 billion.
From the cash flow perspective, BERY generated $1.615 billion in net cash from operating activities, and after accounting for capital expenditures, the non-U.S. GAAP Free Cash Flow for the fiscal year 2023 was $926 million.
Looking Forward
As BERY navigates through market softness and customer destocking, the company remains focused on its strategic objectives and financial discipline. The management team is committed to driving long-term value creation for shareholders through operational efficiency, strategic investments, and prudent capital allocation.
Investors and interested parties can access further details about BERY's financial performance and strategic outlook by joining the conference call or visiting the company's investor relations website.
BERRY's financial results reflect the resilience of its business model amidst challenging market conditions. The company's ability to maintain a stable adjusted EPS and its commitment to shareholder returns underscore its strategic focus and operational strength. As BERY continues to adapt and evolve, it remains a key player in the packaging and engineered products industry.
Explore the complete 8-K earnings release (here) from Berry Global Group Inc for further details.
This article first appeared on GuruFocus.
