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Jun 30, 2024
Lancaster Colony Q4 2024 Earnings Report
Lancaster Colony reported a significant increase in operating income and net income for Q4 2024, driven by reduced restructuring charges and improved gross profit, despite a slight decline in net sales.
Key Takeaways
Lancaster Colony Corporation reported a strong fourth quarter for fiscal year 2024, with consolidated net sales declining slightly by 0.4% to $452.8 million. Despite the modest sales decline, gross profit increased by $4.4 million to $97.6 million, resulting in a gross profit margin of 21.6%. Operating income saw a substantial increase of $30.2 million to $41.7 million, primarily due to a significant reduction in restructuring and impairment charges compared to the prior year. Net income rose to $34.8 million, or $1.26 per diluted share, up from $9.2 million, or $0.33 per diluted share, in the prior year.
Consolidated net sales saw a slight decrease of 0.4% to $452.8 million, primarily due to the exit of perimeter-of-the-store bakery product lines.
Gross profit increased by $4.4 million to $97.6 million, with the gross profit margin improving by 110 basis points to 21.6% due to cost savings programs.
Operating income surged by $30.2 million to $41.7 million, largely benefiting from a $22.3 million net reduction in restructuring and impairment charges.
Diluted earnings per share significantly improved to $1.26 from $0.33 in the prior-year quarter, reflecting the strong increase in net income.
Lancaster Colony
Lancaster Colony
Lancaster Colony Revenue by Segment
Revenue by Segment
Retail Revenue
CapyFin.comFoodservice Revenue
CapyFin.com Forward Guidance
For fiscal year 2025, Lancaster Colony anticipates continued sales growth in the Retail segment, driven by its licensing program and new product introductions, including expanded Texas Roadhouse offerings and gluten-free garlic bread. The Foodservice segment expects sales volume growth from quick-service restaurant customers. The company plans to drive margin improvement through cost savings programs and does not foresee significant commodity cost inflation or deflation.
Positive Outlook
- Retail segment sales are anticipated to continue benefiting from volume growth led by the licensing program.
- Increased sales are expected from new products, flavors, and sizes introduced in fiscal 2024.
- The partnership with Texas Roadhouse has expanded to include their popular dinner rolls, introduced with a regional pilot test.
- Continued positive sales momentum is expected for New York BRAND® Bakery frozen garlic bread products, driven by the introduction of a gluten-free garlic bread and volume growth for Marzetti® refrigerated dressings.
- Foodservice segment sales volume is expected to be led by growth from select quick-service restaurant customers in the mix of national chain restaurant accounts.
- The company expects to drive margin improvement through its cost savings programs.
Challenges Ahead
- External factors, including U.S. economic performance and consumer behavior, may impact demand.
- Price and product competition could affect financial results.
- Adverse changes in freight, energy, or other costs of producing, distributing, or transporting products could impact profitability.
- The impact of customer store brands on branded retail volumes remains a potential challenge.
- The potential for loss of larger programs or key customer relationships could negatively affect performance.
Revenue & Expenses
Visualization of income flow from segment revenue to net income