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Dec 31, 2022
Lancaster Colony Q2 2023 Earnings Report
Lancaster Colony reported record sales and increased profits in the second quarter of 2023.
Key Takeaways
Lancaster Colony Corporation reported an 11.4% increase in consolidated net sales, reaching a second quarter record of $477.4 million. The company's net income increased to $1.45 per diluted share, driven by growth in both the Retail and Foodservice segments and effective pricing actions to offset inflationary costs.
Consolidated net sales increased by 11.4% to a record $477.4 million.
Retail net sales grew by 5.6% to $258.8 million, driven by volume gains in frozen garlic bread and licensing programs.
Foodservice net sales advanced by 19.2% to $218.6 million, led by higher demand from select quick-service restaurant customers.
Consolidated operating income increased by 13.3% to $51.3 million.
Lancaster Colony
Lancaster Colony
Forward Guidance
Looking ahead to our fiscal third quarter, we anticipate Retail sales will continue to benefit from our expanding licensing program while, in the Foodservice segment, we expect continued volume growth from select quick-service restaurant customers. Cost inflation will remain a headwind to our financial results, but the pricing actions we have in place along with our cost savings initiatives are expected to offset the increased costs.
Positive Outlook
- Retail sales will benefit from expanding licensing program.
- Foodservice segment expects continued volume growth.
- Pricing actions in place.
- Cost savings initiatives are expected to offset increased costs.
- Ramp up of dressing and sauce production at Horse Cave plant will continue
Challenges Ahead
- Cost inflation will remain a headwind.
- Complexities related to the implementation of our new enterprise resource planning system
- Dependence on contract manufacturers, distributors and freight transporters, including their operational capacity and financial strength in continuing to support our business
- Adequate supply of labor for our manufacturing facilities
- Significant shifts in consumer demand and disruptions to our employees, communities, customers, supply chains, production planning, operations, and production processes resulting from the impacts of COVID-19 and other epidemics, pandemics or similar widespread public health concerns and disease outbreaks