Snyder’s-Lance has admitted its annual profits are set to miss the US snack maker’s previous expectations as commodity costs hit margins from the company’s own-label products.
The company said on Friday (22 July) that “based on current information and market conditions impacting its private-brand products” it sees diluted earnings per share, excluding special items, reaching US$0.75-0.90 in 2011.
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In May, Snyder’s-Lance forecast that diluted EPS for 2011 would be $0.85-1.00.
Snyder’s-Lance blamed “lower profit margins” from its private-brand products. It said a lag in securing price increases to offset commodity costs had hit margins from that side of the business.
The company’s profit warning for 2011 came alongside an estimate that its second-quarter diluted EPS, excluding special items, would be $0.15-0.17.
During the quarter, Snyder’s-Lance expects to incur costs of $15m due to the switch from a “direct store delivery” system to an independent operator model. The move has been part of the company’s plans since the merger of Lance and Snyder’s of Hanover last year.
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By GlobalDataIncluding special items, Snyder’s-Lance expects to post a $0.05-0.07 loss per share for the second quarter.
The company, however, said branded revenues had been “solid” during the quarter and were up around 3.5%.
Snyder’s-Lance plans to publish its full second-quarter figures next month.
