Pinnacle Foods (PF) Recalls Petite Peas Products; Stock Falls

Pinnacle Foods, Inc. (NYSE:PF) recently recalled a limited number of C&W Early Harvest Petite Peas and C&W Petite Peas, after tests showed that these products might contain Listeria monocytogenes.

The frozen products were recalled as a precaution, keeping in view the health and safety of its consumers. Shares of the food company declined 0.45% on Friday after the news broke.

Pinnacle Foods notified that Listeria monocytogenes is an organism that can cause serious infections in young children or elderly people, and can also weaken their immune systems. While it can cause high fever, severe headache, stiffness, nausea, abdominal pain or diarrhea among healthy individuals, it can cause miscarriages and stillbirths among pregnant women. Thankfully, no such case has been reported so far.

The company, on its part, has alerted The Food and Drug Administration and all affected distributors and retail customers to remove the recalled products from its stores. Also, consumers who have purchased the products have been urged to return it or ask for a refund from the place of purchase.

Last month, the company re-affirmed its earnings guidance for 2016. It continues to expect adjusted earnings in the range of $2.08 to $2.13 per share. The company had provided its 2016 guidance along with its first quarter 2016 results, reported on Apr 28. While earnings matched the Zacks Consensus Estimate, revenues missed the same.

Overall, the company boasts a strong brand portfolio and intends to continue to invest in innovation to further differentiate its brands in the marketplace. It has also been pursuing various acquisitions over the years to enhance its distribution network, customer base and long-term growth.

Pinnacle Foods also has an operational excellence program to generate annual productivity savings across the supply chain. The company has raised its savings target for 2016 to a range of 3.5% to 4% of annual cost of products sold, compared with 3% to 4%, which has been achieved over the last five years. These productivity savings, along with higher pricing, have been mitigating the impact of input cost inflation to drive gross margin.

Pinnacle Foods carries a Zacks Rank #3 (Hold).

Key Picks from the Sector

Investors interested in the food industry can also consider stocks like B&G Foods, Inc. (NYSE:BGS) , Post Holdings, Inc. (NYSE:POST) and Lancaster Colony Corporation (NASDAQ:LANC) . All of them hold a Zacks Rank #1 (Strong Buy).