Adds share price, SlimFast sale context throughout

By Padraic Halpin

DUBLIN, Feb 26 (Reuters) - Nutrition supplement maker Glanbia GL9.I announced plans to sell its underperforming U.S. weight management brand SlimFast on Wednesday, as its shares slid by 16% after prolonged higher raw material costs prompted it to issue a profit warning.

Glanbia said its earnings could fall by up to 11% this year with a rise in the cost of whey - a key ingredient in the protein powders and shakes popular with gym goers - set to continue into the second half of 2025.

The U.S.-focused company had previously expected whey prices to begin to ease. Finance chief Mark Garvey said whey costs were 20% higher than their previous peak during the COVID-19 pandemic, reflecting high demand for protein products, and would turn at the end of 2025 as supply increases.

Glanbia shares hit a near two-year low of 12.33 euros and were the biggest fallers in Europe.

The SlimFast sale is part of a wider plan targeting annual cost savings of at least $50 million by 2027 and follows a sharp fall in sales since 2022 as weight-loss drugs upend the diet market and consumers moved away from the low-carbohydrate regimes that the 50-year-old brand made its name with.

The rise in popularity of therapies such as Novo Nordisk's NOVOb.CO blockbuster weight-loss injection Wegovy led major U.S. retailers to stock fewer of SlimFast's meal replacement shakes.

Glanbia, which bought SlimFast for $350 million in 2018, took a non-cash impairment charge of $91.4 million in its 2024 results to reflect the brand's performance challenges and the decision to begin the sale process.

SlimFast represented 7% of performance nutrition - one of Glanbia's two divisions - at the end of June.

"SlimFast performed really, really well...then COVID significantly changed the weight management category. The interaction the consumer had in this category is just not what it was," Garvey told Reuters.

Glanbia reported a 6.8% rise in full-year adjusted earnings per share $(EPS)$ to 140.03 cents, in line with its guidance. It forecast that EPS would fall to between 124 and 130 cents with profit margins at its performance nutrition products division narrowing to 13-14% from 16.9% in 2024.

(Reporting by Padraic HalpinEditing by David Goodman, Kirsten Donovan)

((padraic.halpin@thomsonreuters.com; +353 1 500 1504; Reuters Messaging: padraic.halpin.thomsonreuters.com@reuters.net))