Diamond Foods, Inc. (DMND): New Analyst Report from Zacks Equity Research - Zacks Equity Research Report

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Diamond Foods stepped into fiscal 2015 with solid first-quarter results wherein both top and bottom lines marked year-over-year improvement. We observe that the company's turnaround strategies, such as improving price realization, lowering underperforming SKUs and reducing dependency on discounts, have helped it to stabilize falling revenues as apparent from its sales performance. Moreover, we expect its brands to exhibit more sustained growth in the future driven by product innovation and differentiation as well as an improved cost structure. However, we cannot ignore the near-term headwinds such as challenges related to procurement of walnut supplies and mending ties with growers. The company's highly leveraged balance sheet also makes us skeptical about its future performance. Thus, our Neutral recommendation on the stock remains intact.


Headquartered in Stockton, CA, Diamond Foods Inc. is a specialty food company focused on processing, marketing and distribution of snack products and culinary, ingredient and in-shell nuts. Diamond Foods reports its operating results under 2 segments Snacks and Nuts. Snacks segment comprises the Kettle U.S., Kettle U.K. and Pop Secret brands, while the Nuts segment includes the Diamond of California and Emerald brands.

Diamond Foods products are sold in more than 60,000 retail locations in the United States, and also overseas in more than 100 countries, primarily in Germany, Japan, Spain and Italy.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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