Shares in Snyder’s-Lance fell almost 10% yesterday (7 November) despite an increase in third-quarter sales and earnings, driven down by concerns over the US snack maker’s sales outlook.
Snyder’s-Lance closed down 9.24% yesterday, with shares dropping to US$27.01 on the New York Stock Exchange. The decline reflected investor concerns over Snyder’s-Lance’s top-line performance. While the group booked an 11.4% rise in third-quarter sales, which climbed to $453m, the performance missed consensus expectations by $9m. The company also lowered its full-year sales outlook to a range of 9-10% from 10-12%.
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Nevertheless, Snyder’s-Lance said third-quarter net income, excluding special items, was $22.4m, compared to $19.2m in 2012. The firm also narrowed its EPS guidance range to 25-30%, from previous guidance of 22-32%.
“Profit margins appear to be benefiting from [Snyder’s-Lance’s] internal productivity initiatives and input cost relief, particularly in the sticky, lower-margin private label business,” Janney analyst Jonathan Feeney wrote in a note to investors.
Gross margin expanded 110 basis points and EBIT margin rose 120 basis points during the period.
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