Westerville / OH. (lc) Lancaster Colony Corporation reported results for the company’s fiscal third quarter ended March 31, 2022. Summary
- Consolidated net sales increased 12.9 percent to a third quarter record USD 403.5 million versus USD 357.2 million last year. Retail net sales grew 7.4 percent to USD 213.1 million while Foodservice net sales advanced 19.8 percent to USD 190.4 million.
- Consolidated gross profit declined USD 22.2 million to USD 68.3 million.
- Consolidated operating income decreased USD 45.0 million to an operating loss of USD 7.6 million. Note that the current year operating income was unfavorably impacted by a restructuring and impairment charge of USD 22.7 million for the Bantam Bagels business.
- Including the impact of the impairment charge, the company reported a net loss for the quarter of USD 0.17 per diluted share versus net income of USD 1.05 per diluted share last year. The restructuring and impairment charge reduced net income by USD 0.63 per diluted share.
CEO David A. Ciesinski: «We reported another quarter of record sales. (…) Sales gains in our Foodservice segment were driven by inflationary pricing and higher demand for our branded products.»
«We continued to experience unprecedented inflation for raw materials and packaging that accelerated during the period and reflects an increase of nearly 30 percent versus the prior-year quarter. Freight costs also increased approximately 30 percent compared to last year, pacing well ahead of our previous expectations. The net impact of our pricing actions lagged these extraordinary levels of cost inflation. Our financial results were also adversely impacted by higher labor costs and supply chain disruptions attributed to Covid-19-related labor shortages, volatility in customer demand, and some severe weather events.»
«I am very grateful for the continuing efforts of our entire team here at Lancaster Colony as we navigate through these challenges while maintaining the health, safety and welfare of our employees; continuing to play our role in the country’s vital food supply chain; and preparing our business for future growth.»
«Looking ahead to our fiscal fourth quarter, pricing actions will contribute to sales gains in both segments while sales volumes, measured in pounds shipped, will compare to strong growth of 9 percent in Retail and 29 percent in Foodservice. In the Retail segment, we implemented an additional round of pricing actions for our frozen bread and pasta products that took effect in late April and are evaluating further actions for the segment. Pricing in Foodservice remains tied to contractual-based adjustments for changes in commodity and freight costs. We anticipate the unfavorable impacts of higher commodity and packaging costs, increased freight and warehousing costs, broad-based supply chain challenges, and higher labor costs will remain a headwind to our financial results in the coming quarter. Our pricing actions along with our ongoing cost savings programs and net price realization efforts will help to partially offset these higher costs.»
«While we persist in our efforts to overcome the near-term challenges of the current operating environment, longer-term our business remains well-positioned with category-leading Retail brands, a rapidly growing and consumer-relevant Retail licensing program, and a Foodservice business that supplies many of the leading and fastest-growing national chain restaurants in the U.S. When combined with our investments in capacity and infrastructure, we have a strong and unique platform from which to deliver profitable growth in the years ahead.»
For additional information please read the Company’s PDF file below (259 KB):
20220505-LANCASTER-Q3-2022.