Lancaster Colony: Reports Q1-2024 Sales And Earnings

Westerville / OH. (lc) Lancaster Colony Corporation reported results for the company ‘s fiscal first quarter ended September 30, 2024. Summary:

CEO David A. Ciesinski: «We were pleased to complete the quarter with record sales of USD 466.6 million and record gross profit of USD 110.8 million. In the Retail segment, we saw continued growth from our licensing program driven by the «Subway» sauces we launched this past spring and expanding distribution for «Texas Roadhouse» dinner rolls following a successful pilot test. Excluding the perimeter-of-the-store bakery product lines that we exited in March, Retail net sales increased 1.4 percent and Retail sales volume, measured in pounds shipped, increased 1.9 percent. In the Foodservice segment, despite industry-wide trends of slowing traffic, net sales grew 3.5 percent driven by increased demand from several of our national chain restaurant customers and volume gains for our branded Foodservice products.»

«Our reported gross profit margin reflects a sequential improvement of 220 basis points from our fiscal fourth quarter and an increase of 20 basis points compared to last year’s fiscal first quarter as our financial performance benefited from the higher sales volume and our ongoing cost savings initiatives.»

«Looking ahead to our fiscal second quarter and the remainder of our fiscal year, we anticipate Retail segment sales will continue to benefit from our growing licensing program, driven by new product introductions such as «Subway» sauces and «Texas Roadhouse» dinner rolls. Our newly launched New York «Brand» Bakery gluten-free garlic bread will also add to the Retail segment’s sales. In the Foodservice segment, we anticipate continued volume gains from select customers in our mix of national chain restaurant accounts.»

First Quarter Results

Consolidated net sales increased 1.1 percent, or USD 5.0 million, to a first quarter record USD 466.6 million. Retail segment net sales decreased 1.1 percent, or USD 2.6 million, to USD 239.6 million while the segment’s sales volume, measured in pounds shipped, increased 0.3 percent. Retail net sales reflect an increased and more normalized level of trade spending versus last year, as we invested more to support our brands and launch new items. Excluding the perimeter-of-the-store bakery product lines that we exited in March, specifically our «Flatout» and «Angelic Bakehouse» brands, Retail net sales increased 1.4 percent and Retail sales volume increased 1.9 percent. In the Foodservice segment, net sales increased 3.5 percent, or USD 7.6 million, to USD 227.0 million while the segment’s sales volume increased 3.1 percent.

Consolidated gross profit grew 1.9 percent, or USD 2.1 million, to a first quarter record USD 110.8 million. The increase in gross profit was driven by the higher sales volumes and our cost savings programs. As anticipated, our pricing net of commodity costs, or PNOC, was close to neutral.

SG+A expenses increased USD 3.0 million to USD 55.0 million in support of the continued growth of our business, including increased investments in personnel and IT, in addition to higher legal expenses.

Consolidated operating income declined USD 0.9 million to USD 55.9 million. Net income improved USD 0.7 million to USD 44.7 million, or USD 1.62 per diluted share, versus USD 44.0 million, or USD 1.59 per diluted share, last year.