Lancaster posts strong Q2 results
January 28, 2010
by Eric Schroeder
COLUMBUS, OHIO — Enhanced marketing efforts spurred growth in key retail brands and led to higher sales and income at Lancaster Colony Corp. in the second quarter and six months ended Dec. 31, 2009. The maker of New York garlic bread and Texas Garlic Toast and Sister Schubert’s frozen bread had income of $39,527,000 in the second quarter ended Dec. 31, equal to $1.40 per share on the common stock, up 39% from $28,452,000, or $1.02 per share, in the second quarter of fiscal 2009. Net sales totaled $304,115,000, up 6% from $288,242,000.
For the six months ended Dec. 31, net income was $67,932,000, or $2.41 per share, up from $39,472,000, or $1.40 per share. Sales were $558,275,000, up 1% from $552,079,000.
Driving company-wide growth was Lancaster’s Specialty Foods segment, which posted operating income of $56,146,000 in the second quarter, up 42% from $39,651,000 in the second quarter of fiscal 2009. Net sales in the division totaled $243,099,000, down from $245,393,000. The company said the income gain reflected a stronger retail sales mix, improvements in operational efficiencies and an estimated favorable impact in excess of $13 million from raw material cost reductions. For the six months, operating income in the segment rose 57% to $99,298,000, while sales fell 2% to $459,440,000.
“Our key retail brands are benefiting from our enhanced marketing efforts,” said John B. Gerlach Jr., chairman and chief executive officer. “However, we believe second half year-over-year comparative results will be less than robust than the first-half comparisons as we face further pressure on food service sales, substantially less benefit from lower ingredient costs, and the seasonal dip in food and candle retail sales dynamics.”