US snack group Lance has cut its sales and earnings targets after booking a drop in net income for the first quarter.

For the period ended 27 March, net income amounted to US$1.2m compared to a profit of $6.5m in the prior year.

Net revenues increased 3% to reach $221.6m. However, the figure was hit by increased promotional pricing during the first quarter.

Nonetheless, sales of branded products to grocery stores, dollar stores, mass merchandisers and distributors increased, compared to the comparable quarter of last year due to the acquisition of cookie maker Stella D'oro.

The firm cut its EPS guidance to $1.10 to $1.25 from a previous guidance of $1.41 to $1.53. It also cut revenue guidance to $930m to $950m, from $965m to 990m forecast in February.

"We are disappointed that our first quarter revenue, profit margin and EPS were well below our expectations," said David Singer, president and CEO. "Our non-branded sales were impacted by more aggressive promotional pricing by branded competitors. Our branded sales suffered from less effective promotions in an increasingly competitive environment.”