42 2GM Wednesday May 25 2022 | the times
Business
A British manufacturer has pledged to
send two million tins of baby formula to
the United States as officials scramble
to increase stocks rapidly amid a
nationwide shortage.
Kendal Nutricare, owner of the
Kendamil brand, is the first inter-
national producers to receive fast-track
approval from American regulators at-
tempting to replenish shelves. The busi-
ness plans to ship “a couple of contain-
ers’ extra production immediately,”
Ross McMahon, chief executive, told
The Times. “Then we could grow that to
probably ten containers a week.”
Supply chain issues had already led
to significant shortages of baby formula
when Abbott, a leading US manufac-
turer, recalled some products and shut
down a key plant this year.
The White House has sought to
alleviate shortages with “Operation FlySnapchat triggered a sell-off in digital
advertising stocks yesterday after a
profit warning that it blamed on a de-
cline in the strength of the wider market.
Shares in Snap, the social media
platform’s parent company, closed
down by $9.68, or 43.1 per cent, at $12.29
in New York last night after it said that
this quarter’s revenue and earnings
would be “below the low end” of its
forecasts published only a month ago.
“The macroeconomic environment
has deteriorated further and faster than
anticipated,” it said.
Pinterest, a rival, suffered a decline ofSnapchat warning
$5.29, or 23.4 per cent, to $17.30 as inves-
tors’ concern over the abrupt reassess-
ment drew some of America’s largest
technology groups into sharp focus.
Meta Platforms, the world’s largest
social media group that owns Facebook
and Instagram, retreated $14.95, or
7.6 per cent, to $181.28; Alphabet, the
market leader in online advertising that
owns Google and YouTube, fell $1114.81,
or 5.1 per cent, to $2,118.52.
Evan Spiegel, the co-founder and
chief executive of Snap, said that it
would ease back on hiring over the
coming year as it braced for revenues to
rise less quickly than anticipated.
Snapchat was founded just over a
decade ago. The app became popularCallum Jones
US Business CorrespondentT
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a cons
h dBaby milk firm scrambles to
Callum Jones Formula,” under which military air-
craft carried stock from Europe to the
US this weekend.
The US Food and Drug Administra-
tion, the regulator, has moved to expe-
dite the approval process for overseas
baby formula manufacturers. Last
night it announced that it had approved
Kendamil products. Some 40,000 tins
are ready to be dispatched immediately,
the agency said, pledging to work
with Kendal Nutricare to ensure they
arrive in the US “as quickly as possible”.
The company estimates that it could
ultimately send two million tins,
according to the FDA, which expects
them to be on US shelves next month.
Kendal Nutricare, founded in 1962
and based in the Lake District, has
about 150 staff. Its Kendal factory can
produce about ten million 900g cans of
baby formula per year, although it is
running at about 50 per cent.
In an attempt to help replenishThe rampant inflation that has been
writ large across the results of compa-
nies throughout the United States was
highlighted again yesterday, this time
by Abercrombie & Fitch, prompting a
steep decline in the casual fashion
chain’s share price.
The retailer has lowered its sales
growth forecast and warned that oper-
ating margins will come under pressure
as it grapples with escalating costs and
braces for a decline in consumer
demand.
That warning sent its shares down by
$7.64, or 28.6 per cent, to $19.09 at the
close on Wall Street.
Net sales rose by 4 per cent to
$812.8 million in the three months to
April 30, but it swung to a loss of
$16.5 million during the quarter, from a
profit of $41.8 million in the same
period in the previous year.
“We expect higher costs to remain a
headwind through at least year-end,”
Fran Horowitz, chief executive at Aber-
crombie & Fitch, said.
She pledged to “manage expenses
tightly” and to find more savings as the
business endured higher freight and
raw material costs.
With price growth at its highest in a
generation in America, some of theAbercrombie adds
to retailers’ gloom
with alert on sales
country’s leading retail chains have
heightened concerns over the impact of
cost pressures on the sector. Walmart,
the hypermarkets group, said last week
that inflation had created more pres-
sure than it had expected on margins
and costs.
Founded in 1892, Abercrombie &
Fitch is based in Ohio and owns brands
including Hollister and Gilly Hicks. It
has a market value of less than $1 bil-
lion. Its controversial reinvention dur-
ing the 1990s was the subject of a recent
Netflix documentary.
The chain previously had forecast
net sales growth of between 2 per cent
and 4 per cent, but it reduced this pro-
jection to between flat and 2 per cent. It
also lowered its margin guidance from
between 7 per cent and 8 per cent to
5 per cent to 6 per cent.
In contrast, Ralph Lauren stoked
expectations for its sales and margins
this year amid robust demand for its
luxury apparel in key markets, includ-
ing the US and Europe.
Shares in the group inched 19 cents
higher to $91.14 after it beat
expectations in the last quarter, with
revenue rising 18 per cent to $1.52 bil-
lion. It made a net profit of $24.4 mil-
lion in the three months to April 2,
reversing a loss of $74.1 million the
previous year.Callum Jones