Lancaster Colony booked an increase in sales today (20 August), supported by organic growth and M&A, but the company's earning growth trailed top line gains.
The US company revealed that full-year net sales increased 6.1% to US$1.1bn. Excluding the contribution of the recently acquired flatbread maker Flatout, sales were up 4.8%.
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Lancaster said operating income rose at a slower pace of 1.7%, increasing to $154.9m in the period. Margins were down 75 basis points on the prior year. Lancaster cited “dressing production capacity constraints” and “higher freight costs” for the constriction as well as lower pricing in foodservice and transaction expenses related to the Flatout deal.
However, chairman and CEO John Gerlach, Jr., said that the group saw “improved” operating margins in the fourth quarter and stressed that the company completed its dressing capacity expansion project "midway" through the year.
He said: "The completion of our dressing capacity expansion project midway through our fiscal year and the acquisition of the Flatout flatbread business in our third quarter were notable investments as we look towards future growth opportunities. Our focus on product innovation, consumer trends and customer service led to gains in both our retail and foodservice channels this past year, lifting our speciality foods segment to another year of record sales."
Net earnings totalled $101.7m, versus net profit of $101m in fiscal 2014. However, adjusting for discontinued operations, last year's net income totaled $75m including a loss of approximately $44m on the sale of Lancaster's candle operations.
