WESTERVILLE, OHIO — Lancaster Colony Corp. is riding a wave of impressive sales growth, thanks in part to successful licensing deals with popular brands like Texas Roadhouse, Buffalo Wild Wings, Chick-fil-A, and Olive Garden.
Additionally, the company’s own cherished brands—such as New York Bakery, Sister Schubert’s, and Marzetti—are thriving in the second quarter.
Strong Performance from Licensing Partnerships
During a recent earnings call on February 4, David Ciesinski, the president and CEO of Lancaster Colony, discussed this exciting momentum.
He pointed to the strong performance of frozen dinner rolls they introduced in partnership with Texas Roadhouse last fall.
According to Ciesinski, Lancaster Colony has successfully created a product that captures the essence of Texas Roadhouse’s famous rolls, which have historically attracted loyal patrons.
Currently, these Texas Roadhouse frozen dinner rolls are available at 4,000 Walmart locations, and the company has ambitious plans to broaden their presence across various retail and mass merchandise outlets in the upcoming months.
Notably, consumer research indicates that customers tend to repurchase these rolls roughly every 13 days, highlighting their popularity and the strong loyalty within the frozen goods category—something Ciesinski finds particularly noteworthy.
Market Share and Financial Performance
In the realm of frozen dinner rolls, sales from Sister Schubert’s and the licensed Texas Roadhouse brand surged by an impressive 15.9%.
This increase has helped Lancaster secure an enviable 60.8% market share, a jump of 440 basis points.
Furthermore, the New York Bakery brand also made headway in the frozen garlic bread segment, achieving a 2.8% sales increase and capturing more market share.
For the fiscal quarter ending December 31, the company announced a net income of $48.99 million, equating to $1.78 per common share.
This figure represents a slight decline compared to last year’s earnings of $51.48 million, or $1.87 per share.
Lancaster noted that this decrease was primarily due to a noncash pension settlement charge and additional costs tied to the acquisition of a new production facility in Atlanta that will focus on sauces and dressings.
Future Expansion Plans
Looking ahead, Ciesinski expressed confidence in the acquisition of the Winland Foods facility, which is slated to finalize later this quarter.
This new plant will significantly enhance Lancaster’s ability to produce a variety of items, from cooked dishes to sauces, broadening their product line and expanding their reach in the culinary market.
The strategic location of the Atlanta facility is expected to boost efficiency and reduce costs, allowing Lancaster to better connect with its customer base.
Excitingly, plans are in place to implement specialized packaging systems at this plant to manufacture sauces for Chick-fil-A, which will further solidify their position in the market.
From a performance perspective, Lancaster Colony reported a 4.8% rise in net sales for the quarter, reaching $509.3 million compared to $485.92 million last year.
The retail sector stood out with a stellar 6.3% growth, while foodservice saw a 3% increase.
Notably, when excluding the sales from retired product lines, retail sales showcased an impressive 8.4% growth, underscoring the company’s positive outlook and commitment to continued expansion.
In summary, Lancaster Colony Corp. is effectively harnessing its licensing strategies while simultaneously enjoying remarkable growth through its beloved product lines, setting the stage for a dynamic future ahead.
Source: Foodbusinessnews