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Lancaster Colony Corp. (LANC)
NASDAQ:LANC
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Lancaster Colony
(NASDAQ:LANC)
72Outperform
Positive Factors
Cost Efficiency
LANC displayed strong SG&A efficiency as adjusted dollars spent declined while the company grew revenues.
Earnings
LANC reported operating results that solidly beat consensus expectations from both a revenue and profitability standpoint.
New Product Development
New product momentum helps fuel better than expected margins and earnings results for LANC.
Negative Factors
Non-Recurring Items
Non-recurring items explained much of the topline shortfall, giving comfort in management’s expectations for future performance.
Revenue Shortfall
LANC reported F3Q25 operating results with a material revenue shortfall that outweighed continued margin improvement.
Lancaster Colony (LANC) vs. S&P 500 (SPY)
Market Cap
$4.45B
Dividend Yield2.29%
Average Volume (3M)204.76K
Price to Earnings (P/E)26.2
Beta (1Y)0.21
Revenue Growth0.69%
EPS Growth27.48%
CountryUS
Employees3,400
SectorConsumer Defensive
Sector Strength82
IndustryPackaged Foods
Share Statistics
EPS (TTM)1.54
Shares Outstanding27,569,000
10 Day Avg. Volume276,869
30 Day Avg. Volume204,762
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.00
Price to Cash Flow (P/CF)0.00
P/FCF Ratio0.00
Enterprise Value/Market Cap1.06
Enterprise Value/RevenueN/A
Enterprise Value/Gross Profit10.94
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$198.00Price Target Upside18.85% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering5
Lancaster Colony Business Overview & Revenue Model
Company DescriptionLancaster Colony Corporation manufactures and markets food products for the retail and foodservice markets in the United States. The company operates in two segments, Retail and Foodservice. It offers frozen garlic bread under the New York BRAND Bakery; frozen Parkerhouse style yeast and dinner rolls under the Sister Schubert's brand; salad dressings under the Marzetti, Cardini's, and Girard's; flatbread wraps and pizza crusts under the Flatout brand; croutons and salad toppings under the New York BRAND Bakery, Chatham Village, and Marzetti; frozen pasta under the Marzetti Frozen Pasta brand; and vegetable and fruit dips under the Marzetti brand. In addition, it manufactures and sells other products to brand license agreements, including Olive Garden dressings, Buffalo Wild Wings sauces and Chick-fil-A sauces. The company sells its products through sales personnel, food brokers, and distributors to retailers and restaurants. Lancaster Colony Corporation was incorporated in 1961 and is based in Westerville, Ohio.
How the Company Makes MoneyLancaster Colony makes money primarily through the sale of its specialty food products to both retail and foodservice customers. The company's revenue streams are diversified across its branded retail products sold in grocery stores, supermarkets, and mass merchandisers, as well as its foodservice offerings that cater to restaurants and institutions. Lancaster Colony's strong brand portfolio and reputation for quality enable it to maintain robust distribution channels and partnerships with major retailers and foodservice operators, which are significant contributors to its earnings.
Lancaster Colony Financial Statement Overview
Summary
Lancaster Colony demonstrates strong financial health with solid revenue growth and profitability. The income statement shows efficient operational management with stable margins and a positive growth trajectory. The balance sheet reflects low leverage and effective equity utilization, although asset efficiency could improve. Cash flow is robust, with consistent free cash flow generation, highlighting effective cash conversion.Income Statement
Lancaster Colony's income statement shows strong financial performance with a consistent increase in revenue over the years, reflected in a TTM revenue of $1.89 billion. The gross profit margin stands at 23.7%, and the net profit margin is 9.0% for TTM, indicating solid profitability. Notably, there is a healthy revenue growth rate of approximately 0.8% from the previous annual period. The EBIT margin of 11.8% and EBITDA margin of 14.3% demonstrate efficient operational management. The company exhibits a strong trajectory in revenue and profit growth.―
Balance Sheet
The balance sheet reflects a stable financial position with a debt-to-equity ratio of 0.04, indicating low leverage and conservative financial management. The return on equity (ROE) is 17.0%, showing effective use of equity capital to generate profits. The equity ratio is 59.1%, highlighting a robust capital structure. While the company has maintained low debt levels, there is potential for improvement in asset utilization.78
Cash Flow
Lancaster Colony's cash flow statement indicates strong cash generation capabilities with a TTM operating cash flow of $207.4 million. The free cash flow growth rate of 4.3% compared to the previous annual period signifies positive cash flow trends. The operating cash flow to net income ratio of 1.22 and free cash flow to net income ratio of 1.13 highlight efficient cash conversion. Overall, the cash flow position is solid, with consistent free cash flow generation.―
| Breakdown | ||||
| Jun 2024 | Jun 2023 | Jun 2022 | Jun 2021 | Jun 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.87B | 1.82B | 1.68B | 1.47B | 1.33B | Gross Profit |
| 432.30M | 388.57M | 355.72M | 386.72M | 358.04M | EBIT |
| 199.36M | 141.51M | 111.91M | 132.36M | 140.27M | EBITDA |
| 270.13M | 217.69M | 189.50M | 228.17M | 215.74M | Net Income Common Stockholders |
| 158.61M | 111.29M | 89.59M | 142.33M | 136.98M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 163.44M | 88.47M | 60.28M | 188.06M | 198.27M | Total Assets |
| 1.21B | 1.11B | 1.09B | 1.10B | 993.35M | Total Debt |
| 57.67M | 29.99M | 36.23M | 33.27M | 24.66M | Net Debt |
| -105.78M | -58.49M | -24.05M | -154.78M | -173.61M | Total Liabilities |
| 281.16M | 250.73M | 245.69M | 258.14M | 210.05M | Stockholders Equity |
| 925.77M | 862.27M | 844.69M | 843.15M | 783.30M |
| Cash Flow | Free Cash Flow | |||
| 183.98M | 135.72M | -30.16M | 86.32M | 88.13M | Operating Cash Flow |
| 251.55M | 225.90M | 101.81M | 174.19M | 170.77M | Investing Cash Flow |
| -67.43M | -90.78M | -132.24M | -88.98M | -83.27M | Financing Cash Flow |
| -109.15M | -106.93M | -97.34M | -95.43M | -85.52M |
Lancaster Colony Technical Analysis
Negative
166.60
Price Trends
180.07
Negative
179.59
Negative
180.28
Negative
Market Momentum
-5.27
Positive
38.30
Neutral
16.30
Positive
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LANC, the sentiment is Negative. The current price of 166.6 is below the 20-day moving average (MA) of 178.95, below the 50-day MA of 180.07, and below the 200-day MA of 180.28, indicating a bearish trend. The MACD of -5.27 indicates Positive momentum. The RSI at 38.30 is Neutral, neither overbought nor oversold. The STOCH value of 16.30 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for LANC.
Lancaster Colony Risk Analysis
Lancaster Colony disclosed 28 risk factors in its most recent earnings report. Lancaster Colony reported the most risks in the “Production” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Lancaster Colony Peers Comparison
Overall Rating
UnderperformOutperform
Sector (64)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
74 Outperform | $3.66B | 25.24 | 8.40% | ― | 11.47% | 2.59% | |
73 Outperform | $5.94B | 10.34 | 21.60% | 2.44% | 5.85% | ― | |
72 Outperform | $4.45B | 26.23 | 17.73% | 2.29% | 0.69% | 27.48% | |
70 Outperform | $6.36B | 18.94 | 9.15% | ― | 1.48% | 9.36% | |
68 Neutral | $7.23B | 20.12 | 21.63% | 2.85% | -2.49% | -65.96% | |
64 Neutral | $8.81B | 14.72 | 5.05% | 174.27% | 3.55% | 3.81% | |
58 Neutral | $3.68B | 14.91 | 17.97% | 5.46% | 0.25% | 101.63% |
* Consumer Defensive Sector Average
Performance Comparison
LANC
Lancaster Colony
166.60
-27.06
-13.97%
BRFS
BRF SA
3.38
-0.11
-3.15%
FLO
Flowers Foods
17.21
-7.11
-29.24%
SMPL
Simply Good Foods
35.82
-1.89
-5.01%
POST
Post Holdings
110.74
3.93
3.68%
LW
Lamb Weston Holdings
50.83
-32.91
-39.30%
Lancaster Colony Earnings Call Summary
Earnings Call Date:Apr 30, 2025
(Q3-2025)
| % Change Since: -13.63%|
Next Earnings Date:Aug 21, 2025
Earnings Call Sentiment Neutral
While the company faced challenges with declining net sales and external factors affecting the Foodservice segment, it achieved record gross profit and operating income. Market share gains in key categories, successful integration of a new facility, and a strong financial position provide a solid foundation for future growth.Q3-2025 Updates
Positive Updates
Record Third Quarter Gross Profit
Achieved a record third quarter gross profit of $106 million, representing a 1.4% increase compared to the prior year, with gross margin improving by 90 basis points to 23.1%.
Expansion of Licensing Programs
Retail segment's licensing program remained a source of growth, with Chick-fil-A sauce beginning distribution in the club channel and Texas Roadhouse dinner rolls performing well.
Market Share Gains in Key Segments
In the frozen dinner roll category, brands grew 11.6%, increasing market share by 520 basis points to 60.9%. New York Bakery's frozen garlic bread sales grew 6.8%, adding 180 basis points in market share to lead at 43.9%.
Operating Income Growth
Consolidated operating income increased by 41.9% to $50 million, driven by lower SG&A costs and improved gross margin.
Strong Financial Position
The company remains debt-free with $124.6 million in cash, despite the $78.8 million acquisition of an Atlanta-based manufacturing facility.
Successful Integration of Atlanta Facility
Acquired an Atlanta-based sauce and dressing facility, which is expected to enhance the manufacturing network and support future growth.
Negative Updates
Decline in Net Sales
Consolidated net sales declined by 2.9% to $457.8 million, affected by lower core volume, product mix, and the exit of certain bakery product lines.
Foodservice Segment Challenges
Net sales in the Foodservice segment declined by 3.2% due to weather impacts and industry-wide declines in restaurant traffic.
Retail Segment Sales Decline
Retail segment net sales decreased by 2.6%, influenced by softer demand and the shift of some sales to the next quarter due to a later Easter holiday.
Closure of Milpitas Facility
Announced the planned closure of the Milpitas, California sauce and dressing facility, impacting 78 employees, as part of network optimization efforts.
Company Guidance
During the Lancaster Colony Corporation's fiscal year 2025 third quarter conference call, guidance indicated a 2.9% decline in consolidated net sales to $458 million, despite achieving third-quarter records for both gross profit at $106 million and operating income at $50 million. The Retail segment saw a 2.6% decrease in net sales, excluding exited bakery lines, with specific product highlights including an 11.6% growth in the frozen dinner roll category led by Sister Schubert’s and Texas Roadhouse brands, and a 6.8% increase in frozen garlic bread led by the New York Bakery brand. The company reported a gross profit margin improvement of 90 basis points to 23.1%, attributable to supply chain productivity and favorable pricing. Looking ahead, Lancaster Colony anticipates challenges in the consumer environment but expects new product innovations and strategic licensing, such as the expansion of Chick-fil-A sauce into club channels, to drive growth. The company maintains a strong financial position with a debt-free balance sheet and $124.6 million in cash, despite a recent acquisition costing $78.8 million.Lancaster Colony Corporate Events
Executive/Board ChangesBusiness Operations and Strategy
Lancaster Colony Appoints New Retail Business President
Positive
Apr 7, 2025
On April 7, 2025, T. Marzetti Company, a subsidiary of Lancaster Colony Corporation, announced the appointment of Tanya Berman as President of its Retail business unit, effective April 21, 2025. With extensive experience in management and marketing from companies like Mondelez and Mars Wrigley, Berman’s leadership is expected to enhance the company’s market position and operational efficiency.
Spark’s Take on LANC Stock
According to Spark, TipRanks’ AI Analyst, LANC is a Neutral.
Lancaster Colony’s strong financial performance and positive earnings call results are offset by weak technical indicators and high valuation. While the company is financially healthy, its stock may be overvalued with limited near-term momentum.
To see Spark’s full report on LANC stock, click here.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.