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Dec 31, 2020
Lancaster Colony Q2 2021 Earnings Report
Lancaster Colony reported record sales and gross profit for Q2 despite challenges from COVID-19.
Key Takeaways
Lancaster Colony Corporation reported a 5.6% increase in consolidated net sales, reaching a second-quarter record of $375.0 million. Retail net sales grew by 19.5%, while Foodservice net sales declined by 9.7%. Consolidated gross profit also increased by 7.0% to a record $106.8 million. Net income was $1.62 per diluted share, compared to $1.58 per diluted share in the previous year.
Consolidated net sales increased 5.6% to a second quarter record $375.0 million.
Retail net sales grew 19.5% to $222.6 million, driven by higher demand for at-home food consumption and the success of licensing programs.
Foodservice net sales declined 9.7% to $152.4 million due to the impacts of COVID-19.
Consolidated gross profit increased 7.0% to a second quarter record $106.8 million.
Lancaster Colony
Lancaster Colony
Lancaster Colony Revenue by Segment
Revenue by Segment
Retail Revenue
CapyFin.comFoodservice Revenue
CapyFin.com Forward Guidance
Lancaster Colony anticipates net sales to benefit from continued gains in Retail for dressings and sauces sold under exclusive license agreements. The impacts of COVID-19 are expected to remain a headwind for manufacturing costs, while commodities and freight expense are expected to become increasingly inflationary. Ongoing cost savings programs and net price realization efforts will help offset these higher costs.
Positive Outlook
- Net sales are expected to benefit from continued gains in Retail.
- Dressings and sauces sold under exclusive license agreements are expected to drive retail growth.
- Ongoing cost savings programs will help to offset higher costs.
- Net price realization efforts will help to offset higher costs.
- ERP initiative is progressing as planned with implementation on track to commence in early fiscal 2022.
Challenges Ahead
- Impacts of COVID-19 will remain a headwind for manufacturing costs.
- Commodities expense is expected to become increasingly inflationary.
- Freight expense is expected to become increasingly inflationary.
- Demand remains constrained by the impacts of COVID-19 in Foodservice segment.
- Higher overall effective tax rate of 23.8% in the current-year quarter compared to 21.0% last year.
Revenue & Expenses
Visualization of income flow from segment revenue to net income