Philadelphia / PA. (tb) Tasty Baking Company reported that it lost one million USD during its first quarter as a result of rising ingredient and packaging costs. The Philadelphia-based company said net sales also were down during the quarter ended March 29, 2008, declining 3,4 percent to 42,8 million USD from 44,3 million USD last year.
The company said sales were stronger last year because Easter didn´t fall into the first quarter. This year, however, an early holiday cut into the company´s first-quarter sales. The company typically sees a sales dropoff as Easter candy and home-cooked desserts become paramount to many consumers.
Profits also were stronger a year ago, at 900.000 USD, or 0,11 USD per share, in the first quarter of 2007. The company said the one million USD loss this year (0,12 USD per share) stemmed from a two million USD, pre-tax hit in higher ingredient and packaging costs. Rising costs drove the gross margin down by 7,5 percentage points.
President and Chief Executive Officer Charles P. Pizzi said in a release that the company had imposed price increases to help counteract the rising prices of commodities. «In addition the company is actively managing risk from higher ingredient and packaging prices through long-term supply arrangements for key ingredients like sugar, which is one of our largest commodities» (press release).
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