We currently maintain a long-term Neutral recommendation on Dean Foods Co. The company is a leading processor and distributor of milk and other dairy products in the U.S. as well as a leading manufacturer of various specialty food products.
To counter the ill effects of declining milk processing profits from increased money-offs on private label items and weak sales volume, Dean Foods is taking prudent steps, such as price realization through passing input cost inflation to customers, cost reduction initiatives and increasing volume performance. These fundamental steps will facilitate in stemming the rot and rebuilding the company's profitability.
Moreover, Dean Foods continues to make headway in its efforts to achieve the lowest cost position in the industry. Management has already reduced headcounts by 600 positions across all areas of businesses, which have led to a significant amount of cost savings in the current fiscal.
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