Lancaster net falls on higher material costs
October 28, 2010
by Eric Schroeder
COLUMBUS, OHIO — Net income at Lancaster Colony Corp. fell 20% during the first quarter of fiscal 2011. Net income in quarter ended Sept. 30 totaled $22,767,000, equal to 81c per share on the common stock, down from $28,405,000, or $1.01 per share, in the same period of fiscal 2010. Net sales in the quarter rose 4% to $265,051,000 from $254,160,000.
“While we posted higher first-quarter sales, increased material and other costs challenged our margins when comparing to record-high net income a year ago,” said John B. Gerlach Jr., chairman and chief executive officer.
The maker of New York garlic bread, Texas Garlic Toast, Sister Schubert’s frozen bread and Marzetti dips and dressings posted operating income within its Specialty Foods division of $37,973,000, down 12% from $43,152,000. Net sales in the division totaled $220,512,000, up 2% from $216,341,000.
Lancaster said specialty foods sales benefitted from increases in the food service channel due to expanded volume associated with new customer programs. Overall retail sales fell less than 1%, with growth achieved in some non-frozen lines largely offset by softness within the frozen garlic bread category.
“We are encouraged by the early customer reception of our retail food products that are currently being introduced into grocery produce departments,” Mr. Gerlach said. “Marzetti Otria Greek yogurt-based veggie dips began shipping in the first quarter. In the second quarter we began shipping Marzetti Simply Dressed refrigerated salad dressings, which address the current consumer nutritional/wellness focus on natural, preservative-free foods.”