Business

Snyder’s-Lance Q2 earnings top Wall Street estimates

Some cartons of Toast Chee need hands on help to straighten or add packages to complete the carton.
Some cartons of Toast Chee need hands on help to straighten or add packages to complete the carton. jsimmons@charlotteobserver.com

Snyder’s-Lance reported second-quarter earnings Monday that topped Wall Street estimates thanks to robust sales growth across the Charlotte-based company’s portfolio, which includes a growing number of “better-for-you” healthy snacks.

For the three months that ended July 4, the Charlotte-based snack-maker reported profits of $17.3 million, up from $11.7 million in the same quarter last year, according to a securities filing. Excluding special items, the company reported earnings earnings per share of 27 cents, above the median estimate of 25 cents a share from analysts surveyed by Bloomberg.

Sales for the second quarter totaled $431 million, up about 8 percent over the same quarter in 2014 but slightly below the Wall Street forecast of $432 million.

Snyder’s-Lance – known for its Cape Cod Kettle Chips, Toast Chee crackers and Snyder’s of Hanover pretzels – has, like other food manufacturers, been beset by changing consumer behavior, especially a preference for healthier options.

Chief Executive Officer Carl Lee Jr. said as a mid-sized company, Snyder’s-Lance is nimble and has been able to adapt to changing demands by offering a balanced variety of snacks.

“We are providing consumers with a wide selection of better-for-you snacks to cater to that demand, but we’re also investing in innovation from our premium snacks, making sure consumers who are looking for indulgent items are equally served,” Lee said in a call with analysts Monday.

The company said that “better-for-you” items such as gluten-free sandwich crackers comprise 27 percent of its portfolio, up from 24 percent at this time last year. Company-wide, the eventual goal is for healthier options to make up 33 percent of the total portfolio.

Strong sales of Cape Cod Kettle Chips and Snyder’s of Hanover pretzels helped fuel growth for the quarter, the company said. The chip sales grew at a double-digit rate and the pretzels gained “significant market share” thanks to new products and a new ad campaign, Snyder’s-Lance said.

The company also said it enjoyed strong returns from new “better-for-you” snack businesses like organic chip maker Late July, in which Snyder’s-Lance increased its ownership in November, and Clearview Foods, a new division the company created earlier this year.

Lee has called 2014 “transformative,” because it included a number of deals for Snyder’s-Lance as it expanded a foothold in the healthier snack market. Last May, the Snyder’s-Lance bought Baptista’s Bakery, a Wisconsin-based, private-label baked snack manufacturer known for its “better-for-you” snacks.

In after-hours trading Monday, the snack-maker’s shares were down less than 1 percent at $32.66.

Katherine Peralta: 704-358-5079, @katieperalta

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