By Scott Kanowsky
Investing.com -- Shares in JDE Peet's (AS:JDEP) rose toward the top of the pan-European Stoxx 600 on Wednesday after the Dutch coffee seller posted better than expected first-half core income thanks to a spike in demand.
Adjusted earnings before interest and taxes came in at €631M, down 2.1% when excluding foreign exchange effects and other changes, but above company-provided guidance of between €545M - €605M. Cost cuts and price increases were offset by larger investments in advertising, digital and emerging markets, the company said.
Total reported sales jumped by 19.7% during the first six months of the year to €3.90B, approaching the top end of estimates of between €3.6B - €3.9B, thanks to strong performance in its Latin America, Russia, Middle East and Africa unit, as well as positive foreign exchange impacts.
JDE Peet's, which owns beverage brands like Douwe Egberts and Pickwick, confirmed its plan to deliver double-digit organic sales growth and stable gross profit this year, along with free cash flow of at least €1B.
But the firm warned it still faces "unprecedented" trading uncertainty, particularly from soaring expenses and losses related to disruption of its Russian operations due to the war in Ukraine.
"JDE Peet's expects the business environment to remain volatile for the remainder of 2022 as input cost inflation, geopolitical unrest and certain effects of the pandemic persist," it said in a statement.
Earlier this year, JDE Peet's said it would keep lifting the price of its coffee to combat inflation. This move helped profit hold up well on an annualized basis during the half, according to chief executive officer Fabien Simon.