FOR IMMEDIATE RELEASE SYMBOL: LANC April 30, 2025 TRADED: Nasdaq MORE. . . • Consolidated net sales declined 2.9% to $457.8 million versus $471.4 million last year. Retail segment net sales decreased 2.6% to $241.5 million. The decline in Retail net sales includes the impact of the company's exit from our perimeter-of-the-store bakery product lines in March 2024. Excluding all sales attributed to those product lines, Retail segment net sales decreased 0.7%. Foodservice segment net sales declined 3.2% to $21 ...

Core Viewpoint - The U.S. stock market experienced significant volatility due to tariff policies announced by the Trump administration, prompting a shift towards defensive stocks, particularly in the consumer staples sector, which is considered stable during economic fluctuations [2][5][6]. Group 1: Market Overview - U.S. stock markets had a strong rally in 2024, but the bull run halted in February 2025, with major indexes like the Dow, S&P 500, and Nasdaq Composite declining by 1.6%, 1.4%, and 4% respectively [3][4]. - The Atlanta Fed projected a contraction of 2.8% in the U.S. economy for the first quarter of 2025, raising concerns about a potential recession [8]. Group 2: Consumer Staples Sector - The consumer staples sector is characterized by its resilience and stability, making it a preferred choice for investors during market volatility [9][10]. - Companies in this sector provide essential products that are less sensitive to economic cycles, ensuring consistent demand [9]. Group 3: Featured Consumer Staples Stocks - **Tyson Foods Inc. (TSN)**: Expected revenue growth of 0.9% and earnings growth of 22.6% for the current year, with a dividend yield of 3.23% [15][12]. - **Molson Coors Beverage Co. (TAP)**: Anticipated revenue growth of 0.3% and earnings growth of 6.5%, with a dividend yield of 3.07% [18][16]. - **Primo Brands Corp. (PRMB)**: Projected revenue growth of over 100% and earnings growth of 54.5%, with a dividend yield of 1.34% [20][19]. - **Lancaster Colony Corp. (LANC)**: Expected revenue growth of 3.1% and earnings growth of 6.1%, with a dividend yield of 2% [23][21]. - **Utz Brands Inc. (UTZ)**: Forecasted revenue growth of 1.2% and earnings growth of 10.4%, with a dividend yield of 1.76% [26][24].

Market Overview - U.S. stock markets experienced a significant rally in 2024 following a strong bull run in 2023, but the bull run halted in February 2025 due to market fluctuations [1] - In February, the Dow, S&P 500, and Nasdaq Composite fell by 1.6%, 1.4%, and 4% respectively, with the Nasdaq posting its worst month since April 2024 [1] Economic Impact of Tariffs - Volatility in the markets is attributed to tariff and trade policies from the Trump administration, including a 25% tariff on imports from Canada and Mexico and a 10% tariff on China [4] - Concerns about the impact of these tariffs on the U.S. economy are rising, particularly as inflation remains above the Federal Reserve's target of 2% [5] - Personal spending, a key component of the U.S. economy, unexpectedly fell in January, alongside declines in retail sales and building construction [5][6] Consumer Staples Sector - The consumer staples sector is characterized as mature and fundamentally strong, with demand generally unaffected by economic cycles, making it a defensive investment option [8] - This sector is known for stability in earnings and cash flows, with many companies being regular dividend payers, thus providing portfolio stability during market fluctuations [9] Recommended Consumer Staples Stocks - **Tyson Foods Inc. (TSN)**: Expected revenue growth of 0.9% and earnings growth of 22.6% for the current year, with a dividend yield of 3.23% [14] - **Molson Coors Beverage Co. (TAP)**: Expected revenue growth of 0.3% and earnings growth of 6.5% for the current year, with a dividend yield of 3.07% [17] - **Primo Brands Corp. (PRMB)**: Expected revenue growth of over 100% and earnings growth of 54.5% for the current year, with a dividend yield of 1.34% [20] - **Lancaster Colony Corp. (LANC)**: Expected revenue growth of 3.1% and earnings growth of 6.1% for the current year, with a dividend yield of 2% [23] - **Utz Brands Inc. (UTZ)**: Expected revenue growth of 1.2% and earnings growth of 10.4% for the current year, with a dividend yield of 1.76% [26]

Core Viewpoint - Growth stocks are appealing due to their potential for above-average financial growth, but identifying strong candidates involves navigating inherent risks and volatility [1][2] Group 1: Company Overview - Lancaster Colony (LANC) is highlighted as a recommended growth stock with a favorable Growth Score and a top Zacks Rank [2][10] Group 2: Earnings Growth - Historical EPS growth for Lancaster Colony is 5.6%, but projected EPS growth for this year is 6%, surpassing the industry average of 4.6% [5][4] Group 3: Cash Flow Growth - Lancaster Colony's year-over-year cash flow growth stands at 27.7%, significantly higher than the industry average of 5.1% [6][7] - The company's annualized cash flow growth rate over the past 3-5 years is 6.2%, compared to the industry average of 4.3% [7] Group 4: Earnings Estimate Revisions - There has been a positive trend in earnings estimate revisions for Lancaster Colony, with the Zacks Consensus Estimate for the current year increasing by 1.5% over the past month [8][10] Group 5: Investment Potential - The combination of a Zacks Rank 2 and a Growth Score of A positions Lancaster Colony as a potential outperformer and a solid choice for growth investors [10]

Company Overview - Lancaster Colony (LANC) is a notable stock within the Consumer Staples sector, which consists of 180 individual stocks [2] - The company currently holds a Zacks Rank of 2 (Buy), indicating a favorable outlook based on earnings estimate revisions [3] Performance Analysis - Year-to-date, Lancaster Colony has increased by approximately 7.8%, while the average performance of Consumer Staples stocks has declined by 0.5%, showcasing LANC's outperformance [4] - In comparison, another Consumer Staples stock, RH, has risen by 2.2% year-to-date, with a consensus EPS estimate increase of 9.7% over the past three months [5] Industry Context - Lancaster Colony is categorized under the Food - Miscellaneous industry, which includes 43 companies and currently ranks 178 in the Zacks Industry Rank. This industry has seen an average decline of about 4.7% this year, indicating LANC's relative strength [6] - In contrast, RH is part of the Consumer Products - Staples industry, which has 30 stocks and is ranked 155, with a year-to-date performance of -1.4% [7]

Group 1 - The company Crude Value Insights provides an investing service and community focused on the oil and natural gas sector, emphasizing cash flow and growth prospects [1] - Subscribers have access to a stock model account with over 50 stocks, detailed cash flow analyses of exploration and production (E&P) firms, and live discussions about the sector [2] - A two-week free trial is available for new subscribers, promoting engagement in the oil and gas market [3]

Group 1 - Lancaster Colony reported quarterly earnings of $2.22 per share, exceeding the Zacks Consensus Estimate of $1.94 per share, and up from $1.93 per share a year ago, representing an earnings surprise of 14.43% [1] - The company posted revenues of $509.3 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 3.24%, compared to year-ago revenues of $485.92 million [2] - Over the last four quarters, Lancaster Colony has surpassed consensus EPS estimates two times and topped consensus revenue estimates three times [2] Group 2 - The stock has underperformed the market, losing about 3.8% since the beginning of the year, while the S&P 500 has gained 1.9% [3] - The current consensus EPS estimate for the coming quarter is $1.62 on revenues of $481.1 million, and for the current fiscal year, it is $6.70 on revenues of $1.9 billion [7] - The Zacks Industry Rank for Food - Miscellaneous is currently in the bottom 21% of over 250 Zacks industries, indicating potential challenges for the stock's performance [8]

Financial Performance - Consolidated net sales for the three months ended December 31, 2024 increased 4.8% to a record $509.3 million compared to $485.9 million in the prior year, driven by higher sales in both Retail and Foodservice segments [64]. - Consolidated gross profit for the three months ended December 31, 2024 increased by $11.3 million to $132.8 million, attributed to higher sales volumes and a favorable sales mix [67]. - Operating income for the three months ended December 31, 2024 increased by $9.9 million to $75.7 million, supported by the increase in gross profit despite higher SG&A expenses [72]. - Consolidated net sales for the six months ended December 31, 2024 increased 3.0% to $975.9 million compared to $947.5 million in the prior year, with volume gains driving the increase [65]. - Diluted net income per share for Q2 2025 was $1.78, down from $1.87 in the prior year, impacted by a pension settlement charge of $0.39 and costs related to the Atlanta plant acquisition of $0.05 [76]. - For the six months ended December 31, 2024, diluted net income per share was $3.40, compared to $3.47 in the prior year, with similar impacts from the pension settlement charge and acquisition costs [77]. Expenses and Investments - Selling, general and administrative (SG&A) expenses for the three months ended December 31, 2024 rose 2.5% to $57.1 million, reflecting increased expenditures related to a planned acquisition and investments in personnel and IT [69]. - Corporate expenses for Q2 2024 totaled $23.7 million, up from $20.9 million in the prior year, primarily due to investments in personnel and costs related to the Atlanta plant acquisition [84]. - A one-time noncash pension settlement charge of $14.0 million was incurred for the three and six months ended December 31, 2024 due to the termination of a merged pension plan [74]. Sales Segments - Retail segment net sales for Q2 2024 increased by 6.3% to $280.8 million, driven by higher sales volumes and growth in the licensing program, with a 16.0% increase in operating income to $69.0 million [79][80]. - Foodservice segment net sales for Q2 2024 grew by 3.0% to $228.5 million, with operating income increasing by 11.7% to $30.3 million, supported by demand from national chain restaurant customers [81][82]. Cash Flow and Financing - Net cash provided by operating activities for the six months ended December 31, 2024, was $127.5 million, down from $141.5 million in the prior year, mainly due to changes in net working capital [88]. - Cash used in investing activities for the six months ended December 31, 2024, was $32.7 million, a decrease from $40.2 million in the prior year, reflecting lower property addition payments [89]. - The company maintains a revolving credit facility of up to $150 million, with no borrowings outstanding as of December 31, 2024, and compliance with all covenants [91][92]. Strategic Plans and Future Outlook - The company plans to continue expanding Retail and Foodservice segment sales through new product introductions, strategic licensing agreements, and potential acquisitions [62]. - The company expects continued growth in Retail sales driven by the licensing program and innovation investments, alongside anticipated volume growth in the Foodservice segment [86]. - The company plans to complete the acquisition of a sauce and dressing production facility in Atlanta for $75 million, expected to close in Q3 2025 [94]. Risks and Challenges - Market risks have not changed materially from those disclosed in the 2024 Annual Report on Form 10-K [102]. - The company faces inflationary pressures resulting in higher input costs [102]. - Changes in demand for products may result from shifts in consumer behavior or loss of brand reputation [102]. - The potential for loss of larger programs or key customer relationships is a concern [102]. - The success and cost of new product development efforts are critical for future growth [102]. - Geopolitical events could create unforeseen business disruptions impacting raw materials and energy costs [102]. - The company is monitoring the impact of regulatory matters affecting its food business, including FDA requirements [102]. - Capacity constraints may affect the ability to meet demand or increase costs [102]. - There is a dependence on contract manufacturers, distributors, and freight transporters for operational capacity and financial strength [102]. - The company is focusing on efficiencies in plant operations and overall supply chain network [102].

Financial Performance - Consolidated net sales increased 4.8% to a record $509.3 million compared to $485.9 million last year[5] - Retail segment net sales grew 6.3% to $280.8 million, driven by licensing programs and key products like Texas Roadhouse dinner rolls and Buffalo Wild Wings sauces[3] - Foodservice segment net sales advanced 3.0% to $228.5 million, supported by higher demand from national chain restaurant accounts[5] - Consolidated gross profit increased by $11.3 million, or 9.3%, to a record $132.8 million, reflecting higher sales volumes and favorable sales mix[5] - Consolidated operating income increased by $9.9 million, or 15.1%, to a record $75.7 million[6] - Net income was $49.0 million, or $1.78 per diluted share, down from $51.5 million, or $1.87 per diluted share last year[8] - The noncash pension settlement charge reduced net income by $10.8 million, or $0.39 per diluted share[9] Expenses and Investments - SG&A expenses rose by $1.4 million to $57.1 million, including $1.6 million related to the planned acquisition of a sauce and dressing production facility[6] - The company anticipates continued growth in Retail sales from its licensing program and innovation investments in its brands[4] - The acquisition of the Atlanta-based sauce and dressing production facility is expected to close in the fiscal third quarter, enhancing operational efficiency and capacity[4] Assets and Liabilities - Total assets increased to $1,239,858 million as of December 31, 2024, up from $1,206,931 million on June 30, 2024, reflecting a growth of approximately 2.7%[23] - Current assets rose to $480,972 million, compared to $443,993 million in the previous period, marking an increase of about 8.3%[23] - Cash and equivalents increased significantly to $203,073 million, up from $163,443 million, representing a growth of approximately 24.2%[23] - Total current liabilities decreased to $167,250 million from $183,969 million, a reduction of about 9.1%[23] - Shareholders' equity improved to $979,866 million, compared to $925,772 million, indicating an increase of approximately 5.8%[23] - Accounts payable decreased to $104,506 million from $118,811 million, reflecting a decline of about 12.0%[23] - Noncurrent liabilities and deferred income taxes decreased to $92,742 million from $97,190 million, a decrease of approximately 4.6%[23] - Inventories slightly decreased to $167,170 million from $173,252 million, a decline of about 3.5%[23] - Other assets decreased to $280,343 million from $285,242 million, reflecting a decline of approximately 1.6%[23] - Accrued liabilities decreased to $62,744 million from $65,158 million, a reduction of about 6.0%[23]

Core Viewpoint - Wall Street anticipates a year-over-year increase in earnings for Lancaster Colony, with a focus on how actual results compare to estimates impacting stock price [1][2] Earnings Expectations - The upcoming earnings report is expected on February 4, 2025, with projected earnings of $1.94 per share, reflecting a +0.5% change year-over-year, and revenues of $494.3 million, up 1.7% from the previous year [3][2] Estimate Revisions - The consensus EPS estimate has been revised down by 0.31% over the last 30 days, indicating a bearish sentiment among analysts regarding the company's earnings prospects [4][10] Earnings Surprise Prediction - The Zacks Earnings ESP model suggests that the Most Accurate Estimate is lower than the consensus estimate, resulting in an Earnings ESP of -2.06%, which complicates predictions of an earnings beat [10][11] Historical Performance - In the last reported quarter, Lancaster Colony was expected to earn $1.70 per share but only achieved $1.62, resulting in a -4.71% surprise. Over the last four quarters, the company has beaten consensus EPS estimates twice [12][13] Conclusion - Lancaster Colony does not appear to be a strong candidate for an earnings beat, and investors should consider other factors before making investment decisions [16]