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Mar 31, 2022
Lancaster Colony Q3 2022 Earnings Report
Lancaster Colony experienced record sales but faced challenges due to inflation, supply chain disruptions, and higher labor costs, resulting in a net loss for the quarter.
Key Takeaways
Lancaster Colony reported record third-quarter sales, driven by growth in both Retail and Foodservice segments. However, significant cost inflation, supply chain disruptions, and higher labor costs led to a decrease in gross profit and operating income, resulting in a net loss for the quarter.
Consolidated net sales increased by 12.9% to a record $403.5 million.
Retail net sales grew by 7.4% to $213.1 million, driven by licensed products and frozen dinner rolls.
Foodservice net sales advanced by 19.8% to $190.4 million due to inflationary pricing and higher demand.
The company reported a net loss of $0.17 per diluted share, impacted by a restructuring and impairment charge for the Bantam Bagels business.
Revenue by Segment
Forward Guidance
Looking ahead to the fiscal fourth quarter, Lancaster Colony anticipates that pricing actions will contribute to sales gains in both segments. However, the company expects that unfavorable impacts of higher commodity and packaging costs, increased freight and warehousing costs, broad-based supply chain challenges, and higher labor costs will remain a headwind to financial results. Pricing actions, cost savings programs, and net price realization efforts will help to partially offset these higher costs.
Positive Outlook
- Pricing actions will contribute to sales gains in both segments.
- Additional round of pricing actions for frozen bread and pasta products took effect in late April.
- Pricing in Foodservice remains tied to contractual-based adjustments for changes in commodity and freight costs.
- Ongoing cost savings programs will help offset higher costs.
- Net price realization efforts will help offset higher costs.
Challenges Ahead
- Higher commodity and packaging costs will remain a headwind.
- Increased freight and warehousing costs will remain a headwind.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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