US snacks maker John B. Sanfilippo & Son posted a 66% increase in net income for its second quarter as the company saw a consumer shift towards private-label products.
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Net income for the quarter was US$5.8m, compared to net income of around $3.5m for the second quarter of fiscal 2008.
Net sales increased to $177.8m from $177m a year ago, although unit volumes decreased by 9.4%. The decrease was offset by price increases due to higher commodity costs.
Total operating income for the period decreased to 8.7% of net sales from 9.4% of net sales for the second quarter of fiscal 2008. The decline was mainly attributable to the non-recurrence of $1.4m in restructuring expenses that were incurred in the second quarter of fiscal 2008.
CEO Jeffrey Sanfilippo said that volume improvement remained the company’s “top priority”.
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By GlobalDataThe company said it was recently awarded new private-label business with an existing customer, which it estimates will combine to amount to around $50m in additional sales for fiscal 2010.
“As a result of difficult economic conditions, we are seeing indications that consumer preferences are shifting towards private-label products in the snack nut category as evidenced by the December AC Nielsen report which showed private-label unit volume increases in the trailing three-month year-over-year comparison, while most branded products, including Fisher, experienced declines in unit volume,” Sanfilippo said.
“We believe that we are well-positioned to take advantage of this change in consumer preferences in our category while at the same time continuing to attempt to improve the Fisher brand’s market share.”
