US snacks group Lance has forecast a recovery in margins later this year as the company bids to push through further price increases to offset soaring costs.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
The company made the prediction despite posting a rise in underlying profits for 2007. Lance saw net profit, excluding one-off items, reach US$23.8m, up from $20.2m.
Revenue was up 4.5% to $762.7m, thanks to rising sales of Cape Cod potato chips and Tom’s salty snacks.
Nevertheless, Lance said profits were hit by a $22m jump in ingredients costs as the price of flour and vegetable oil rose.
President and CEO Dave Singer said Lance would look to increase prices again this year after similar moves in the latter part of 2007.
US Tariffs are shifting - will you react or anticipate?
Don’t let policy changes catch you off guard. Stay proactive with real-time data and expert analysis.
By GlobalData“We are in the process of making additional price adjustments to offset the [cost] increases,” Singer said. “We expect our earnings to be squeezed until our pricing has caught up with the higher level of ingredient costs.
“We anticipate that our earnings in the second half of 2008 will be significantly stronger than the first half of 2008, as we believe that higher pricing will be in place and ingredient costs will have stabilized.”
