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Dec 31, 2021
Lancaster Colony Q2 2022 Earnings Report
Lancaster Colony reported record sales but experienced a decline in gross profit due to inflationary pressures and supply chain disruptions.
Key Takeaways
Lancaster Colony Corporation reported a 14.2% increase in consolidated net sales, reaching a second quarter record of $428.4 million. However, the company faced challenges due to significant commodity, wage, and freight cost inflation, as well as supply chain disruptions, resulting in a decrease in consolidated gross profit and operating income. Net income was $1.25 per diluted share, compared to $1.62 per diluted share in the previous year.
Consolidated net sales increased by 14.2% to a record $428.4 million.
Retail net sales grew by 10.1% to $245.1 million, driven by Chick-fil-A® sauces, Buffalo Wild Wings® sauces, and Sister Schubert’s® frozen dinner rolls.
Foodservice net sales increased by 20.3% to $183.3 million, fueled by strong demand from quick-service restaurant customers and a rebound in branded product demand.
Consolidated gross profit declined to $96.6 million due to commodity, wage, and freight cost inflation, as well as supply chain disruptions.
Lancaster Colony
Lancaster Colony
Lancaster Colony Revenue by Segment
Revenue by Segment
Retail Revenue
CapyFin.comFoodservice Revenue
CapyFin.com Forward Guidance
Looking ahead to the fiscal third quarter, Lancaster Colony expects sales to benefit from increased demand from select national chain restaurant accounts and continued growth for branded products. The company anticipates that higher input costs, increased freight and warehousing costs, elevated expenditures attributed to the enduring supply chain challenges, and higher labor costs will remain a headwind to financial results.
Positive Outlook
- Chick-fil-A® sauces and Buffalo Wild Wings® sauces are expected to remain a growth driver for Retail segment sales.
- Foodservice sales are expected to benefit from increased demand from select national chain restaurant accounts.
- Continued growth is expected for branded products in the Foodservice segment.
- Sales in both segments are expected to benefit from pricing actions.
- Ongoing cost savings programs and net price realization efforts will help to partially offset higher costs.
Challenges Ahead
- Higher input costs are expected to continue.
- Increased freight and warehousing costs are anticipated.
- Elevated expenditures attributed to enduring supply chain challenges will persist.
- Higher labor costs are expected to remain a headwind.
- Unfavorable impacts of inflation are expected to continue.
Revenue & Expenses
Visualization of income flow from segment revenue to net income