Saputo Earnings: Bump in Reported Sales Growth Unlikely to Hold Against a Volatile Macro Backdrop

On the surface, no-moat Saputo posted decent third-quarter results, including a 17% jump in sales, reflective of higher prices and improved volumes. However, this comes on the heels of a 7% downdraft in revenue a year ago, thus tempering our enthusiasm. And in this context, Saputo incurred a CAD 684 million impairment charge related to the more muted prospects that stand to emulate from its UK business (though we admit this is a relatively insignificant piece of the business, with Europe comprising just 6% of consolidated sales).