Snyders-Lance cuts FY sales outlook

Snyder's-Lance cuts FY sales outlook

Shares in Snyder's-Lance fell almost 10% yesterday (7 November) despite an increase in third-quarter sales and earnings, driven down by concerns over the US snack maker's sales outlook.

Snyder's-Lance closed down 9.24% yesterday, with shares dropping to US$27.01 on the New York Stock Exchange. The decline reflected investor concerns over Snyder's-Lance's top-line performance. While the group booked an 11.4% rise in third-quarter sales, which climbed to $453m, the performance missed consensus expectations by $9m. The company also lowered its full-year sales outlook to a range of 9-10% from 10-12%.

Nevertheless, Snyder's-Lance said third-quarter net income, excluding special items, was $22.4m, compared to $19.2m in 2012. The firm also narrowed its EPS guidance range to 25-30%, from previous guidance of 22-32%.

"Profit margins appear to be benefiting from [Snyder's-Lance's] internal productivity initiatives and input cost relief, particularly in the sticky, lower-margin private label business," Janney analyst Jonathan Feeney wrote in a note to investors.

Gross margin expanded 110 basis points and EBIT margin rose 120 basis points during the period.

Show the press release

 

Snyder's-Lance, Inc. Reports Results for Third Quarter 2013

- Reports 2013 third quarter net revenue of $453 million, an increase of 11.4% over prior year
- Reports 2013 third quarter earnings per diluted share of $0.32 excluding special items
- Reports 2013 third quarter earnings per diluted share of $0.33 including special items
- Declares quarterly dividend of $0.16 per share of common stock

 

 

CHARLOTTE, N.C., Nov. 7, 2013 /PRNewswire/ -- Snyder's-Lance, Inc. (LNCE) today reported results for its third quarter of 2013. Net revenue for the third quarter ended September 28, 2013 was $453 million, an increase of 11.4% compared to prior year net revenue of $407 million. Net income excluding special items in the third quarter of 2013 was $22.4 million, or $0.32 per diluted share, as compared to third quarter 2012 net income excluding special items of $19.2 million, or $0.28 per diluted share.  Net income was $22.9 million for the third quarter of 2013, or $0.33 per diluted share, compared to a net income of $17.8 million for the third quarter of 2012, or $0.26 per diluted share.  Special items for the third quarter of 2013 were $0.5 million in after-tax income primarily from the gain on the sale of assets associated with the consolidation of our Canadian manufacturing facilities.  Special items for the third quarter of 2012 were $1.4 million in after-tax expense which included expenses associated with the acquisition of Snack Factory and other merger related costs.

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Net income excluding special items for the first nine months of 2013 was $59.1 million, or $0.84 per diluted share, a gain of 27% as compared to net income excluding special items of $45.7 million, or $0.66 per diluted share, for the first nine months of 2012.  Net income was $55.7 million for the first nine months of 2013, or $0.80 per diluted share, compared to net income of $51.3 million for the first nine months of 2012, or $0.74 per diluted share. Special items for 2013 include after-tax income from the gain on the sale of assets, impairment charges and a substantial self-funded medical expense. Special items for 2012 include after-tax gains on the sale of route businesses from the merger integration and after-tax expenses for other merger related expenses.

"Net revenue for core branded products was up 20%, driven by Snack Factory and core brand market share gains that were supported with increased advertising and social media marketing efforts, including a movie tie-in promotion," commented Carl E. Lee, Jr., President and Chief Executive Officer. "We are pleased with our EPS performance in the third quarter of 2013 as we focus on finishing the year strong and building momentum as we head into 2014.  With our continued focus on emphasizing core brands and widening margins, our team delivered solid results including continued benefits from our acquisition of Snack Factory® Pretzel Crisps®which posted significant year over year sales.  In the third quarter, we were able to improve our gross margin as a percentage of net revenue on a higher mix of branded products, supported by good overall performance from our private brands team."

Mr. Lee continued, "Looking ahead, we are excited about our product lineup for next year.  We have a number of great new items and flavors in our core brands along with improvements in several of our more regional allied brands.  This pipeline of innovation is very robust and we anticipate solid growth as we move into 2014.  We also continue to grow our independent business owner (IBO) based distribution network, and have recently acquired additional routes in a key geography.  Snyder's-Lance is making progress on a number of fronts, and I want to thank everyone involved and especially our associates for their hard work and dedication that drives this company forward every day."

Dividend Declared
The Company also announced the declaration of a quarterly cash dividend of $0.16 per share on the Company's common stock.  The dividend is payable on November 29, 2013 to stockholders of record at the close of business on November 19, 2013.

2013 Estimates
The Company has updated its estimates for the full year 2013.  The Company estimates that its net revenue for the full year 2013 will be up 9% to 10% and earnings per diluted share will increase between 25% and 30%, excluding special items, compared to 2012.  Capital expenditures for 2013 are projected to be between $73 and $75 million.

Original source: Snyder's-Lance