CHARLOTTE, N.C. — The impact that Snyder’s-Lance, Inc. has on the overall snack category grew in the second quarter as several brands gained market share.
Net revenue in the quarter ended July 1 was $579,595,000, up 3.3% from $561,292,000 in the previous year’s second quarter. Net revenue in the company’s Branded segment rose 4.9% to $463,862,000 from $442,363,000.
Market share for the Late July brand grew by more than four points.
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| Brian Driscoll, c.e.o., president and director of Snyder’s-Lance |
“Late July has the No. 1 and No. 2 s.k.u.s (stock-keeping units) in the natural channel and remains the No. 1 contributor to growth in the natural organic tortilla category in the grocery channel with retail sales up 36%,” said Brian J. Driscoll, chief executive officer, president and director of Snyder’s-Lance, in an Aug. 8 earnings call.
Lance sandwich crackers, which had sales growth of 4.5%, picked up three share points and now account for 47% of the sandwich cracker category.
“We're also encouraged by the momentum we are experiencing going into the critical back-to-school period, and we'll benefit in the back half of the year from distribution gains at key retailers,” Mr. Driscoll said. “In addition, consistent with our ambition to invest more in brand equity building activity, we are expanding our successful ‘This is How We Sandwich’ campaign from digital, social and radio to television advertising for the first time. The campaign is airing in 15 of our strongest markets for eight weeks.”
Other brands gaining market share were Cape Cod, up. 2.3 points in potato chips with a sales increase of 1.4%; Kettle Brand, up 2 points in potato chips with a sales increase of 2%; and Snack Factory, up 1.8 points in deli snacks with a sales increase of 8.6%.
“Snack Factory is the No. 1 deli snack brand in the U.S. and is the No. 1 contributor to deli snack category growth,” Mr. Driscoll said.
Snyder’s of Hanover retail sales and shares were flat after the brand’s strong recovery in the second quarter of the previous year. Pop Secret’s share was up by about 80 basis points in the microwave popcorn category, which overall continued to decline.
“The brand’s ‘best butter ever’ product reformulation and packaging renovation started to roll out in early June, and we have seen distribution gains as we rebuild from some of the losses we experienced a year ago,” Mr. Driscoll said. “While the category is still under pressure, we feel good about our progress to date and improving outlook as we head into the peak seasonal months.”
The Partner Brand segment of Snyder’s-Lance had a less successful quarter. Revenue of $75,401,000, was down 4.5% from $78,958,000 in the previous year’s second quarter.
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| Alexander Pease, c.f.o. and executive vice-president of Snyder’s-Lance |
“Partner Brand revenues continue to show softness as these key channel partners struggle in a challenging consumption environment,” said Alexander W. Pease, chief financial officer and executive vice-president of Snyder’s-Lance, in the Aug. 8 call. “While we’re taking steps to support these brands and reduce their dilutive effect on our overall performance, we’re encouraged that our core brand portfolio is not being impacted by these consumption headwinds to the same degree.”
Second-quarter net income under generally accepted accounting principles (GAAP) attributable to Snyder’s-Lance from continuing operations was $3,970,000, or 4c per share on the common stock, which was down 80% from $19,681,000, or 21c per share, in the previous year’s second quarter. Snyder’s-Lance in the 2017 second quarter incurred $29.8 million in pre-tax expenses. Net income attributable to Snyder’s-Lance from continuing operations, excluding special items, was $26.8 million, which compared to $26.7 million in the second quarter of the previous year.
