Headwinds Impacted Snyder’s-Lance’s Revenue for 2015

LNCE Announces Fiscal 2015 Results, Acquires Diamond Foods

(Continued from Prior Part)

What impacted the revenue?

Snyder’s-Lance reported its preliminary fiscal 4Q15 and fiscal 2015 results at the end of January. The company mentioned that the final results didn’t change compared to the preliminary results. The company experienced some headwinds in the fourth quarter. The headwinds impacted the sales.

In this part, we’ll discuss the headwinds. The headwinds are as follows:

• Production outage in a large manufacturing location

• Strategic changes by a large consumer

• General slowdown in industry and market growth

An unexpected power outage from heavy storms at one of Snyder’s-Lance’s largest bakeries caused it to lose the contract and branded sales. However, production was restored in the fourth quarter. Also, there were some strategic changes by a large customer. The changes impacted the company’s display store inventory levels and space for its branded business. Lastly, an industry slowdown impacted the snacking categories where the company’s branded and partner brands businesses compete.

Revenue synergies are expected

Snyder’s-Lance’s management expects the acquisition to benefit the company by increasing its annualized net revenue by ~$2.6 billion. The revenue for fiscal 4Q15 was $406 million—a decline of 7% compared to 4Q14. The net revenue for fiscal 2015 was $1.66 billion—an increase of 2.2% compared to revenue of $1.62 billion in 2014. Excluding the impact of the additional 53rd week in 2014, the revenue rose by 4.1%. The additional week in 2014 resulted in $30.4 million in net revenue.

Peers’ revenue

Its peers in the industry are Kellogg (K), Mondelez (MDLZ), and General Mills (GIS). Kellogg’s revenue fell 10% YoY (year-over-year) in its most recent reported fiscal 4Q15. General Mills’ revenue fell 6% YoY in its last reported quarter. Mondelez’s YoY revenue fell 17% for fiscal 4Q15. The PowerShares Dynamic Food and Beverage (PBJ) and the WisdomTree SmallCap Dividend Fund (DES) invest 3.09% in Snyder’s-Lance as of March 2.

Continue to Next Part

Browse this series on Market Realist:

• Part 1 - Snyder’s-Lance Stock Fell 6% after Its Fiscal 2015 Results

• Part 2 - How Did Snyder’s-Lance End Fiscal 2015?

• Part 3 - Snyder’s-Lance Completes the Acquisition of Diamond Foods