Lassonde (0OO) Q2 2026 Earnings Report

The call highlighted robust profitability, margin expansion, strong operating cash flow and improved leverage, alongside strategic investments and brand/distribution momentum. These positives were balanced by a slight sales decline, a $30M impairment tied to a customer contract change, ongoing category volume softness, and cost/market volatility. Management expects 2026 sales to be slightly below last year but prioritized profitable sales and has taken actions (backfill agreements, NCIB, disciplined revenue management) to mitigate near-term challenges.

Guidance: Lassonde now expects 2026 sales to be slightly below 2025 (excluding foreign exchange and major external disruptions) while prioritizing profitable sales over volume; CapEx is projected to reach up to 7% of sales in fiscal 2026 (Q2 CapEx was $38M), including approximately USD 96M for the New Jersey project (equipment installation underway, transfer of production beginning late 2026 and completing in H1 2027); Q2 net debt was $451M (down from $474M) with net debt/adjusted EBITDA at 1.22x (down from 1.35x) and management expects leverage to remain well below its 3.25x internal maximum; operating cash flow generated $78M in Q2 (vs. -$3M a year ago), days of operating working capital were 46 (vs. 51) and are expected to remain within the historical range, and the company launched an NCIB to buy up to 200,000 common shares (~6.5% of Class A shares) over 12 months (subject to TSX approval); management reiterated cost assumptions that orange and apple concentrate costs should be lower year-over-year, but flagged inflationary pressure on transportation and PET resin, noted most hedges roll off toward year-end, disclosed a $30M impairment (including $27M on a customer relationship) and said Specialty Food has already secured replacement volume representing more than 50% of the expected 2027 shortfall with advanced talks for an additional ~25%.