US snack maker Lance booked a drop in full-year profits today (11 February), despite a 12% jump in sales during the 12 months to 27 December.
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The company posted annual net income, including one-time charges, of US$17.7m, down from fiscal 2007 net income of $23.8m.
Lance said that its margins were dented by a sudden increase in input costs. However, during the fourth quarter, Lance said that it saw an improvement in profitability as it began to feel the benefit of third-quarter pricing initiatives.
“We are pleased with the significant improvement in our profitability in the fourth quarter. As anticipated, the additional price increases that we executed late in the third quarter brought our prices back in line with our costs,” said David Singer, president and chief executive officer.
“During 2008, we continued to make progress on several key initiatives: we delivered solid top line growth in key branded and private brands product categories; we drove efficiencies in our DSD network and supply chain operations; and we made significant progress on the implementation of our new ERP solution.”
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By GlobalDataLooking to next year, Singer said the company would benefit from these initiatives as well as the recent acquisition of Brent & Sam’s and Archway Cookies.
“Despite the temporary decline in our profit margin and EPS during 2008, driven by the sharp escalation of input costs, we believe that our notable accomplishments in 2008 position us well for the future.”
