US snack maker Lance has cut its full-year earnings outlook on the back of increasing ingredient and energy costs.
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The North Carolina-based company posted third-quarter net income of $6.8m, a fall of more than 9% from a year earlier. The result was affected by ingredient cost increases, particularly for potatoes and peanuts.
Third-quarter net revenue, however, reached a “record” $225.6m during the three months to 27 September, up 14% on the year.
Nevertheless, based on its third-quarter results and an assessment of its current sales volume trends for the fourth quarter, Lance said it is narrowing its 2008 full-year net sales estimate to $840m-$850m.
“The earnings shortfall in the quarter was due to a temporary increase in our cost of potatoes and peanuts, higher than anticipated energy costs, and a temporary increase in promotional spending,” said David Singer, president and CEO.
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By GlobalData“Our potato and peanut costs are now back to normal, energy costs are declining and we have implemented sufficient pricing to offset our higher input costs.”
