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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Lancaster Colony Corporation | NASDAQ:LANC | NASDAQ | Common Stock |
Price Change | % Change | Share Price | Bid Price | Offer Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|---|---|
-1.59 | -0.85% | 186.30 | 186.04 | 186.58 | 187.21 | 185.40 | 186.07 | 6,880 | 16:05:21 |
Lancaster Colony Corporation (Nasdaq: LANC) today reported results for the company’s fiscal second quarter ended December 31, 2023.
Summary
CEO David A. Ciesinski commented, “We were very pleased to complete the quarter with record sales and profit. In addition to carryover pricing, Retail segment net sales growth of 2.0% was driven by volume gains for our successful licensing program, continued strong performance for our New York BRAND® Bakery frozen garlic bread and increased demand for our Reames® frozen egg noodles. In the Foodservice segment, sales growth of 1.5% was led by higher demand from several of our national chain restaurant accounts along with volume growth for our branded Foodservice products. It is worth noting that, during the period, Foodservice segment sales were adversely impacted by deflationary pricing.”
“Our reported gross profit margin improved to 25.0%, an increase of 360 basis points versus last year, which reflects favorable pricing net of commodity costs, or PNOC, following two years of unprecedented inflation, in addition to the positive impacts of our cost savings initiatives.”
“Looking ahead to our fiscal third quarter, we project Retail sales will continue to benefit from our expanding licensing program while, in the Foodservice segment, we expect sustained volume growth from select quick-service restaurant customers. We anticipate continued favorability in our pricing net of commodity costs, but at a sequentially lower level compared to our fiscal second quarter. Deflationary pricing is expected to remain a headwind to Foodservice segment net sales.”
Second Quarter Results
Consolidated net sales increased 1.8% to a second quarter record $485.9 million versus $477.4 million last year. Retail segment net sales grew 2.0% to $264.0 million. Beyond the favorable impact of our fiscal 2023 pricing actions, key contributors to the increase in Retail segment net sales included our licensing program, most notably Chick-fil-A® sauces and dressings; our New York BRAND® Bakery frozen garlic bread products; and our Reames® frozen egg noodles. Retail segment sales volume, measured in pounds shipped, declined 1.9%. Excluding the impacts of a recent value engineering initiative and our reduced commitment to private label bread, Retail sales volume increased 1.2%. In the Foodservice segment, net sales improved 1.5% to $221.9 million despite deflationary pricing. Foodservice sales volume, measured in pounds shipped, increased 4.6% led by higher demand from several of our national chain restaurant accounts along with volume growth for our branded Foodservice products.
Consolidated gross profit increased $19.4 million, or 19.0%, to a second quarter record $121.5 million, which reflects favorability in our pricing net of commodity costs and the impact of our cost savings initiatives. Partial offsets to these positive factors included higher labor costs and increased depreciation expense.
SG&A expenses rose $4.9 million to $55.7 million driven by increased consumer spending and higher brokerage costs. Expenditures for Project Ascent, our ERP initiative, continued to wind down with costs totaling $2.0 million in the current-year quarter versus $7.5 million last year.
Consolidated operating income grew $14.4 million, or 28.1%, to a second quarter record $65.8 million driven by the increase in gross profit partially offset by the higher SG&A expenses.
Net income increased $11.5 million to $51.5 million, or $1.87 per diluted share, versus $1.45 per diluted share last year. Expenditures for Project Ascent reduced net income by $1.5 million, or $0.06 per diluted share, in the current-year quarter compared to $5.7 million, or $0.21 per diluted share, in the prior-year quarter.
Fiscal Year-to-Date Results
For the six months ended December 31, 2023, net sales increased 4.9% to $947.5 million compared to $902.9 million a year ago. Net income for the six-month period totaled $95.4 million, or $3.47 per diluted share, versus the prior-year amount of $77.6 million, or $2.81 per diluted share. In the current-year period, spend for Project Ascent decreased net income by $4.5 million, or $0.16 per diluted share. In the prior-year period, spend for Project Ascent decreased net income by $12.8 million, or $0.47 per diluted share.
Conference Call on the Web
The company’s second quarter conference call is scheduled for this morning, February 1, at 10:00 a.m. ET. Access to a live webcast of the call is available through a link on the company’s Internet home page at www.lancastercolony.com. A replay of the webcast will also be made available on the company’s website.
About the Company
Lancaster Colony Corporation is a manufacturer and marketer of specialty food products for the retail and foodservice channels.
Forward-Looking Statements
We desire to take advantage of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995 (the “PSLRA”). This news release contains various “forward-looking statements” within the meaning of the PSLRA and other applicable securities laws. Such statements can be identified by the use of the forward-looking words “anticipate,” “estimate,” “project,” “believe,” “intend,” “plan,” “expect,” “hope” or similar words. These statements discuss future expectations; contain projections regarding future developments, operations or financial conditions; or state other forward-looking information. Such statements are based upon assumptions and assessments made by us in light of our experience and perception of historical trends, current conditions, expected future developments; and other factors we believe to be appropriate. These forward-looking statements involve various important risks, uncertainties and other factors, many of which are beyond our control, which could cause our actual results to differ materially from those expressed in the forward-looking statements. Some of the key factors that could cause actual results to differ materially from those expressed in the forward-looking statements include:
Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update such forward-looking statements, except as required by law. Management believes these forward-looking statements to be reasonable; however, you should not place undue reliance on statements that are based on current expectations.
LANCASTER COLONY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
(In thousands except per-share amounts)
Three Months Ended
Six Months Ended
December 31,
December 31,
2023
2022
2023
2022
Net sales
$
485,916
$
477,394
$
947,488
$
902,931
Cost of sales
364,448
375,292
717,298
701,774
Gross profit
121,468
102,102
230,190
201,157
Selling, general & administrative expenses
55,714
50,775
107,661
100,532
Operating income
65,754
51,327
122,529
100,625
Other, net
1,425
478
2,282
208
Income before income taxes
67,179
51,805
124,811
100,833
Taxes based on income
15,695
11,832
29,376
23,268
Net income
$
51,484
$
39,973
$
95,435
$
77,565
Net income per common share: (a)
Basic
$
1.87
$
1.45
$
3.47
$
2.82
Diluted
$
1.87
$
1.45
$
3.47
$
2.81
Cash dividends per common share
$
0.90
$
0.85
$
1.75
$
1.65
Weighted average common shares outstanding:
Basic
27,425
27,471
27,437
27,460
Diluted
27,440
27,493
27,457
27,476
(a) Based on the weighted average number of shares outstanding during each period.
LANCASTER COLONY CORPORATION
BUSINESS SEGMENT INFORMATION (Unaudited)
(In thousands)
Three Months Ended
Six Months Ended
December 31,
December 31,
2023
2022
2023
2022
NET SALES
Retail
$
263,992
$
258,763
$
506,176
$
481,979
Foodservice
221,924
218,631
441,312
420,952
Total Net Sales
$
485,916
$
477,394
$
947,488
$
902,931
OPERATING INCOME
Retail
$
59,521
$
49,352
$
112,645
$
92,252
Foodservice
27,145
26,696
53,778
58,625
Corporate Expenses
(20,912
)
(24,721
)
(43,894
)
(50,252
)
Total Operating Income
$
65,754
$
51,327
$
122,529
$
100,625
LANCASTER COLONY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands)
December 31,
June 30,
2023
2023
ASSETS
Current assets:
Cash and equivalents
$
133,848
$
88,473
Receivables
100,188
114,967
Inventories
158,192
158,265
Other current assets
13,171
12,758
Total current assets
405,399
374,463
Net property, plant and equipment
490,391
482,206
Other assets
253,135
256,325
Total assets
$
1,148,925
$
1,112,994
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable
$
104,114
$
111,758
Accrued liabilities
59,262
56,994
Total current liabilities
163,376
168,752
Noncurrent liabilities and deferred income taxes
77,223
81,975
Shareholders’ equity
908,326
862,267
Total liabilities and shareholders’ equity
$
1,148,925
$
1,112,994
View source version on businesswire.com: https://www.businesswire.com/news/home/20240131029981/en/
Dale N. Ganobsik Vice President, Corporate Finance and Investor Relations Lancaster Colony Corporation Phone: 614/224-7141 Email: ir@lancastercolony.com
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