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]

Core Insights - Lancaster Colony Corporation (LANC) is acquiring a sauce and dressing production facility in Atlanta, GA, from Winland Foods, Inc. for approximately $75 million, expected to close in Q1 2025 [1][2] Acquisition Details - The facility spans around 300,000 square feet, with 250,000 square feet dedicated to manufacturing operations [2] - This acquisition aims to enhance operational efficiency, increase production capacity, and improve proximity to key customers, thereby strengthening LANC's manufacturing network [3][4] Financial Performance - In Q1 of fiscal 2025, LANC reported a consolidated sales increase of 1.1% to $466.6 million and a gross profit growth of 1.9% to $110.8 million, attributed to higher volumes and cost-saving initiatives [5] - The Foodservice segment experienced a 3.5% increase in net sales, driven by demand from national chain-restaurant customers [8] Product Development and Market Position - LANC's licensing program, particularly with Subway sauces and Texas Roadhouse Dinner Rolls, is a key growth driver for its retail segment [6] - Marzetti, a brand under LANC, saw a 2.4% sales increase and a market share gain of approximately 25 basis points in Q1 [7] Financial Health - As of September 30, 2024, LANC had cash and cash equivalents totaling $135.1 million and no outstanding borrowings, indicating strong financial management [9] - The board of directors recently raised the quarterly dividend by 5 cents to 95 cents per share, marking 62 consecutive years of dividend increases [10] Stock Performance - LANC stock has gained approximately 4.7% in the past month, outperforming the industry decline of 6.1% and the S&P 500's growth of 0.6% [11] - The forward 12-month price-to-earnings ratio for LANC is 25.99X, significantly higher than the industry's ratio of 15.39X, indicating a higher valuation relative to expected earnings growth [12]

Financial Data and Key Metrics Changes - Consolidated net sales increased by 1.1% to a record $467 million for the first quarter [5] - Gross profit rose by 1.9% to a record $111 million, with gross margin improving by 20 basis points compared to the previous year [10][11] - First-quarter diluted earnings per share increased by $0.03 or 1.9% to $1.62, driven by a lower tax rate and return on invested cash [15] Business Line Data and Key Metrics Changes - Retail segment net sales declined by 1.1%, but excluding exited bakery lines, sales increased by 1.4% and volume grew by 1.9% [6] - Foodservice segment net sales grew by 3.5%, with volume measured in pounds shipped advancing by 3.1% [10] - Sister Schubert's brand sales advanced by 5.3%, and combined with Texas Roadhouse Dinner Rolls, sales were up 17.9% [9] Market Data and Key Metrics Changes - Marzetti brand in the produce dressing category grew sales by 2.4%, with market share increasing by 25 basis points [8] - Chick-fil-A sauces grew by 3.4%, while Buffalo Wild Wing sauces increased by 5% in the shelf-stable sauces and condiments categories [9] - The overall foodservice industry is experiencing slowing traffic trends, but the company is still seeing positive sales growth [10][21] Company Strategy and Development Direction - The company aims to accelerate core business growth, simplify the supply chain to reduce costs, and expand through focused M&A and strategic licensing [19] - New product introductions, such as Subway sauces and Texas Roadhouse Dinner Rolls, are expected to drive retail segment sales [20] - The company is optimistic about the licensing strategy, which has proven to be an incremental source of revenue [56] Management's Comments on Operating Environment and Future Outlook - Management noted that consumer headwinds may continue to exert downward pressure on traffic, but they expect to deliver low single-digit growth based on their book of business and innovation efforts [25][26] - The company anticipates that input costs will be neutral for the remainder of the year, with no significant inflationary pressures expected [21] - Management expressed cautious optimism about the consumer environment, indicating that while there are challenges, they believe consumers will eventually reach a point of equilibrium [28][29] Other Important Information - The company returned funds to shareholders with a quarterly cash dividend of $0.90 per share, representing a 6% increase from the prior year [17] - Capital expenditures for fiscal 2025 are forecasted to be between $70 million and $80 million, focusing on cost-saving projects and manufacturing improvements [16] Q&A Session Summary Question: What is driving the outperformance in foodservice? - Management attributed the outperformance to a mix of national chain customers and strong demand for chicken and sauces, particularly during football season [24][25] Question: What are the prospects for consumer trends in 2025? - Management expressed caution, noting that while wage growth has exceeded inflation, consumers are still making tough trade-offs [28][29] Question: Why is foodservice profitability diverging from retail? - Management explained that foodservice operating income declined due to higher labor and supply chain investments, while retail benefited more from cost-saving initiatives [32] Question: How is the Texas Roadhouse Dinner Rolls launch performing? - Early indications show strong consumer interest and repeat purchases, with plans for further distribution expansion [39][40] Question: What is the outlook for gross margins moving forward? - Management expects to continue improving gross margins through productivity initiatives and cost-saving measures, despite some headwinds from trade spending [44][46] Question: How does the licensing strategy impact potential partnerships? - Management noted that the success of existing partnerships, like Olive Garden, enhances attractiveness for new licensing opportunities [62][64] Question: What is the company's approach to acquisitions? - Management indicated a willingness to pursue both acquisitions and licensing opportunities simultaneously, focusing on value creation for shareholders [54][56]

Lancaster Colony (LANC) came out with quarterly earnings of $1.62 per share, missing the Zacks Consensus Estimate of $1.70 per share. This compares to earnings of $1.70 per share a year ago. These figures are adjusted for non-recurring items.This quarterly report represents an earnings surprise of -4.71%. A quarter ago, it was expected that this specialty food maker would post earnings of $1.41 per share when it actually produced earnings of $1.35, delivering a surprise of -4.26%.Over the last four quarters ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 Form10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2024 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission file number 000-04065 | --- | --- | --- | |-------------------------------------------------------------------------------|------------------ ...

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EzumeImages August 22nd was a bad day for shareholders of Lancaster Colony Corporation (NASDAQ:LANC). The company, which produces and sells food products like frozen breads, refrigerated dressings, dips, croutons, and more, saw its share price plummet by 12.3%. This decline came after management reported financial results covering the final quarter of the company's 2024 fiscal year. Investors were clearly unhappy with the fact that revenue, earnings, and adjusted earnings, all fell short of analysts' foreca ...