Third-quarter sales for Snyder's-Lance jumped 3.7% to $564.2 million, with net income from continuing operations reported at $32.7 million. This represents a 10.5% boost, compared to $29.6 million in the year-ago period. Earnings per diluted share just missed expectations by a penny, coming in at 33 cents, compared to 30 cents in the year-ago period.
The Charlotte, North Carolina-based snack company's net revenues were up 3.7% to $564 million compared to a year ago, with a near 5% bump from core brands. These include its two namesakes, Kettle, Cape Cod, Snack Factory, Pretzel Crisps, Pop Secret, Emerald and Late July.
President and CEO Brian J. Driscoll was positive about the company's future prospects. "Looking ahead to 2018, our organization is beginning to make progress in our performance transformation plan as indicated by these results," he said in the earnings report. "While we have much work to do, we firmly believe that we have the opportunity to unlock substantial profitability improvements over time, and will unlock the considerable potential of our branded portfolio to drive improved total shareholder return."
These most recent numbers continue the trend from a positive second quarter and are a welcome sign. Snyder's-Lance has had a rough year, with the sudden resignations of its CEO and CFO amid dire warnings of an earnings drop. Driscoll stepped up to the company's top spot only a few months ago, but his previous experience as CEO of Diamond Foods appears to have served the company well so far.
The company realized some Q3 operating cost improvements due to cost-cutting and supply chain productivity initiatives, although it also saw higher service and distribution costs related to trucking capacity. There continue to be higher-than-normal manufacturing costs as it ramps up Emerald brand production at the North Carolina plant, which was recently moved from a manufacturing facility in Stockton, California. However, the company said those costs are likely to decrease with time.
The snack maker has big plans to both grow and cut back. It outlined its growth plans at the Deutsche Bank Global Consumer Conference in June, emphasizing national distribution, an increased focus on millennials and the possibility of future M&A. Snyder's 2016 acquisition of Diamond Foods, maker of Kettle brand potato chips, helped rejuvenate organic growth within the company.
Snyder's also recently announced a $7.8 million expansion of its Baptista's Bakery facility, which will create 125 jobs and include building, machinery and equipment updates. Snyder's acquired the independent bakery in 2014 to add to its healthier brands portfolio — Baptista's Bakery focuses on baked and better-for-you snack foods. This investment should push the company in the right direction as competition heats up in the snack category.
At the same time, the company has closed other plants. This summer, Snyder's-Lance announced it was shuttering a chips plant in Perry, Florida, cutting about 250 jobs. The closure, part of what the company called a "multi-year transformation plan," was to be completed in September.
Performance during the past two quarters indicates that the company's comprehensive transformation program is bearing fruit. After a disappointing first quarter, Snyder's-Lance had indicated it might divest some of its non-core brands. There had also been talk in the past year that the company could be for sale. There was no mention of M&A or brand sales in the third-quarter report.