Nut and snack manufacturer John B. Sanfilippo & Son has posted an increase in losses for its third quarter.
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The company saw its losses widen due to a decline in sales volume from the loss of major private label contracts in the fourth quarter of last year.
Net loss for the current quarter totalled around US$6.2m, up from a net loss of $5.9m for the comparable quarter of last year. The group’s loss for the nine months to date totalled $9.8m, compared to net loss a year earlier.
Sanfilippo revealed that sales dropped by 10.1%, or $12m, to $107m in the quarter, resulting from the loss of private label contracts.The company also blamed a lack of promotional activity on the part of some of the company’s larger private label retail customers.
“The third quarter was a disappointing quarter especially in respect to declines in unit volume sold. The high cost of most tree nuts in the previous year has had a negative impact upon the willingness of our private label retail customers to fund promotional activity,” Jeffrey T. Sanfilippo stated.
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By GlobalDataHowever, looking to the coming quarter, the group was optimistic about seeing margins and sales improvements. “We no longer have the commodity cost issues that we had last year, and we believe that our prices are now at levels that can facilitate promotional activity,” Sanfilippo said.
The company also revealed that it has secured $25m-worth of new private label contracts with existing and new customers. The positive impact these agreements will have on results are expected to be seen from this month.
