Gruma USA thrives with retail tortilla business advantages

29 Feb, 2024

Gruma USA thrives with retail tortilla business advantages

Positive performance from the retail tortilla industry significantly contributed to Gruma USA's robust financial results in fiscal 2023. In the year ended December 31, 2023, Gruma USA reported a noteworthy increase in operating income, reaching $565.2 million, a 28% surge compared to $440.9 million in fiscal 2022. Additionally, operating income for the fourth quarter ended December 31 saw an 11% rise to $156 million from $140.7 million.

The company experienced a 14% boost in net sales in fiscal 2023, reaching $3.65 billion, up from $3.2 billion in the previous year. Despite net sales in the fourth quarter remaining nearly unchanged at $890.4 million compared to $890.7 million a year ago, Gruma USA highlighted the positive performance of its retail tortilla business, which drove growth in sales volumes.

However, the fourth quarter saw a 6% decline in sales volume to 395,000 tonnes, mainly due to the effects of an additional week of operations in the previous year. Excluding this effect, tortilla volumes only declined by 1%, with the retail tortilla channel leading the way, particularly with the better-for-you product line. Conversely, the foodservice channel experienced a significant contraction due to higher price sensitivity and a client selectivity process.

Gruma noted an improvement in operating margin by 170 basis points to 17.5% during the fourth quarter, with cost of sales as a percentage of net sales remaining flat relative to the previous year. The company invested $56 million in capital expenditures during the fourth quarter, allocating funds to equipment replacement, capacity expansion in the United States, and production expansion in other regions like Australia, China, and Malaysia.

Overall, Gruma SAB de CV reported a substantial increase in majority net income in fiscal 2023, totaling $429.5 million, a 35% rise compared to fiscal 2022, with net sales reaching $6.58 billion, up 18% from the previous year.