Dean Foods Co. announced unexpectedly late Friday that its chairman had resigned, casting uncertainty over the country’s largest milk processor before its report on quarterly results.
The Dallas company gave no explanation for the departure of Tom C. Davis, who has been nonexecutive chairman since 2013. His resignation was announced in a regulatory filing about 5:30 p.m. ET. A Dean Foods spokesman declined to comment. Mr. Davis couldn’t immediately be reached.
A Dallas-based investment banker, Mr. Davis, who was 66 years old as of April, joined Dean Foods’ board in 2001. He became chairman when it split off its plant-based dairy products division as WhiteWave Foods Co., and Dean Foods’ former chairman left to head the new company.
Dean Foods has suffered from a decades-long decline in per-capita U.S. milk consumption, which was compounded starting in 2013 by a nearly two-year-long spike in the price of raw milk that pinched profits. It has been closing factories and slashing other costs.
Last year, Dean Foods’ overall milk sales volume fell 4% to 2.7 billion gallons from a year earlier, and the company reported its third year in five of annual losses from continuing operations, which exclude WhiteWave.
While milk consumption has continued to slide, milk prices have fallen sharply since last fall, bolstering Dean Foods’ prospects. The company is scheduled to report quarterly results Monday. Analysts expect it to say that revenue fell 14% to $2.1 billion in the second quarter, and that net profit increased to $21 million from a loss in the prior year, according to Thomson Reuters.
Executives also are expected to detail some of the initial results from the company’s move in May to combine its 31 regional white milk brands under one moniker, DairyPure, in a bid to reinvigorate sales and take market share from other milk providers.
Mr. Davis also is chief executive of Concorde Group, a private investment firm, according the Dean Foods website. Concorde couldn’t be reached Friday.
Dean Foods shares edged down 0.1% in after-hours trading Friday following the announcement.
By Ilan Brat
Source: Dow Jones Newswires