US snackfoods group Lance has reported net revenues for the third quarter of $191.9m, up 12% from the same period last year, but third-quarter net income fell by 7% to $7.5m.
Third-quarter net income excluding special items was $7.8m, down by 3% from the third quarter last year. Earnings per diluted share excluding special items in the third quarter were $0.25, against $0.27 last year.
The company said that branded product sales were up 18%, reflecting continued growth in sales of Lance sandwich crackers and Cape Cod potato chips. These gains had been partially offset, however, by declines in vending and food service products. Non-branded product sales increased by 2% during the third quarter which Lance said reflected the continued softness in the mass merchandiser channel driven by significantly lower promotions by major customers.
In spite of the drop in earnings, Lance’s president and CEO David Singer expressed satisfaction with the results. “We are pleased with our third-quarter performance, which was in line with our earnings expectations,” Singer said. “During the quarter, we continued to achieve growth in our core product categories, with positive results reported in Cape Cod chips and Lance sandwich crackers.”
Singer added that the company had continued to make progress on key initiatives during the quarter, including plant consolidations, the opening of distribution centres in Texas and Florida, shifting of salty snack production to acquired facilities and beginning the implementation of a much needed enterprise computer system solution.
However, Singer added that the company was experiencing substantially higher flour costs as it moved into the fourth quarter and said the company expected non-branded revenues to be lower than original expectations. As a result, the company has revised its full-year guidance, lowering its full-year projection for net sales to between approximately $745 and $755m, and its estimate of earnings per diluted share to a range of $0.64 to $0.67, excluding special items.
Previously, the company had been forecasting full-year net sales of $750 to $775m and earnings per diluted share estimate of approximately $0.70 to $0.75, excluding special items.