Competitive pricing pressures hit earning and sales for US-based nut group John B. Sanfilippo & Son in the first quarter.
In the three months ended 26 September, net income dropped 9.3% to US$6.8m. Around half of the $0.8m decline was attributable to a pre-tax gain on sale of assets of $0.6m in the comparable quarter last year.
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Operating profit was down 11.5% to $12.3m, while sales dropped slightly to $176.7m from $177.5m last year.
Sales volume, however, increased by 14%. The favourable impact on net sales from the volume increase was offset by lower selling prices. Selling prices decreased mainly in pecan and peanut products in response to lower acquisition costs, the company said.
“Notwithstanding the challenges we faced in the current first quarter, such as competitive pricing pressure with some of our major customers, we nearly matched those record levels, especially after factoring out the unfavourable impact on net income from sales of assets in the quarterly comparison,” said CEO Jeffrey Sanfilippo. “Significantly lower peanut selling prices compared to peanut selling prices in last year’s first quarter also put additional pressure on net sales and gross profit in the current first quarter.”
Click here to view the full earnings release.
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