Lifeway Foods has seen full-year earnings dip due to an increased investment in marketing and higher raw milk prices.
Total net income in the 12 months to end-December fell to US$2.9m, or $0.17 a share, down from $3.6m, or $0.22 a share last year, the kefir maker said yesterday (2 April).
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Operating expenses as a percentage of sales rose to 25% in the period, up from 24% the previous year and selling-related expenses increased 34% to $10.2m as the group invested in its 25th anniversary marketing drive.
The group also said that profits were dented by an increase in the price of organic and conventional milk during the period, which was up 20-25% on the previous year.
Nevertheless, CEO Julie Smolyansky said that Lifeway was “very pleased” with the result, which included a 21% increase in sales, which rose to around $77.1m in the year.
“In 2012 we will begin limited distribution of our kefir products in Target, including 189 PFresh and 249 SuperTarget stores. In addition, our frozen kefir continues to gain momentum and we expect it to produce approximately $0.6m in sales in the first quarter of 2012.”
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