For the nine months ended March 31 net income was $77,071,000, or $2.77 per share, down 16% from $92,154,000, or $3.27 per share, in the same period a year ago. Sales were $833,912,000, up 3% from $808,603,000.
Operating income within Lancaster’s Specialty Foods segment fell 18% during the third quarter to $31,664,000, while sales in the division increased narrowly to $217,436,000 from $216,471,000. For the nine months, operating income in the segment fell 12% to $121,025,000, while sales rose 2% to $692,539,000.
“We were pleased with the growth of food service sales, which led to record third-quarter Specialty Foods sales,” said John B. Gerlach Jr., chairman and chief executive officer. “However, our third-quarter comparisons were difficult due to the strength of the prior-year quarter, this year’s later Easter, a less favorable sales mix, higher commodity and freight costs, and lower production levels within our frozen roll operations. While our key retail products generally maintained solid market positions and we saw good placement of recently introduced retail food products, we also experienced somewhat weaker than hoped retail food volumes.”
Mr. Gerlach added fourth-quarter Specialty Foods volumes should benefit from the later Easter, as well as further contributions from newer product introductions.
“The segment’s net sales and margins should also reflect recently implemented pricing actions, which we anticipate should mitigate the impact of higher food commodity costs,” he said.