Dive Brief:
- Snyder’s-Lance reported net revenue increased 18.7% to $531.5 million for the first quarter of 2017, thanks in part to the contribution of Diamond Foods, according to its latest earnings report.
- The company’s legacy net revenue grew 3.3% compared to the first quarter of 2016, helped by the Branded category net revenue growth of 8.8%.
- Operating income for the company came in at $23.9 million, a positive number when compared to the operating loss of $27.3 million reported in the first quarter of 2016.
Dive Insight:
Despite some surprising news about an unexpected leadership change last month, Snyder’s-Lance’s earnings for its first quarter came in with some positive results year over year. This was good news for stockholders who saw shares of the company drop considerably after Carl Lee Jr.’s retirement announcement.
The company’s legacy net revenue grew 3.3%. Total net revenue from continuing operations grew 18.7% compared to the first quarter of 2016. While these numbers may not be exactly what was hoped once the company acquired Diamond Foods, things are looking up and interim CEO Brian J. Driscoll promised leadership was working to right the ship even more.
"We are moving aggressively to take action," Driscoll said in the earnings report. "Our organization has already begun to coalesce around a set of priorities and actions designed to unlock substantial profitability across the Company while sharply expanding our gross margins, over time. We expect these actions to significantly improve our financial performance and deliver long-term sustainable value for our shareholders."
For now, boosting profitability remains one of Snyder's-Lance's key growth strategies, with management expressing a goal of double-digit operating margins. If Driscoll becomes permanent CEO, as many believe he will, it should add some more stability and get the company heading in the right direction again.
Snyder's-Lance has a great product portfolio for growth in today's consumer world. Snacking is at an all-time high, with almost a quarter of all snack food consumption coming at meals. Almost all respondents to a Datassentials study said they had snacked the day before, with nearly half eating at least one salty snack. And the better-for-you snacks in the Diamond Foods portfolio can also help the company increase its sales and bottom line.