US consumer goods group Lancaster Colony today (28 October) announced a rise in sales but a fall in net income in the first quarter of its financial year.
Net sales reached US$275m, up 4% on the same period last year, but net income dropped to $21.2m or $0.78 per diluted share, from the prior-year’s $22.7m, or $0.81 per diluted share.
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Operating income slid to $32.5m, down from $34.8m last year, while net income fell to $21.2m, down from $22.7m in 2010.
Chairman and CEO John Gerlach placed higher material costs as the cause of the drop as the company could not fully offset them with higher pricing.
“Despite increased first quarter consolidated sales driven by our Specialty Foods segment, operating income was again challenged by substantially higher material costs”, he said.
Specialty foods sales increased 7% rise to $236.9m, benefiting from higher pricing and volume improvements in both foodservice and branded retail lines, notably in frozen breads, the company said.
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By GlobalDataGerlach added: “Although economic challenges facing consumers add to the level of uncertainty, we anticipate second quarter top-line trends similar to that of the first quarter, including solid growth in our specialty foods segment.
“We remain well-positioned to support future growth given the ongoing strength of our market position and balance sheet.”
