Snyder’s-Lance Sees Private Label Growth Ahead
Private label snack maker Snyder’s-Lance said profits grew 38 percent in 2012 from a year earlier, with revenues up 2.2 percent.
The company forecast revenues rising 10 percent to 12 percent in 2013, with earnings growing between 22 percent and 32 percent.
“This was an important and successful year for Snyder’s-Lance,” CEO David Singer said in a news release.
Fourth-quarter sales rose 1.9 percent from a year ago, while profits climbed 44 percent to $20.4 million.
Private label sales slowed in the fourth quarter, down 3.1 percent from a year ago to $77.5 million, and for the full year sales fell 6.9 percent from 2011 to $291.1 million.
“Private brands were very close to our internal targets,” President Carl Lee said. “So we’re quite happy with what we’ve done on private brands.”
Singer said the private brands business had gone through category rationalization over the year and that he expected that work to pay dividends in 2013.
“Most of the heavy lifting is behind us, so we should see some stabilization in 2013,” Singer said. “So we’re going to continue to manage that business to really protect the franchise but at the same time make sure that we maximize our margins. So we will see the top line improve and we’ll continue to see some ways to make sure we leverage that business to not only grow but support our core brands as well.”
In response to a question from an analyst on the earnings conference call, Lee talked about the operating margins for private label at Snyder’s-Lance.
“If you look at the peer group on private brands, it’s somewhere between 7 and 9 percent operating margin, and we believe that we’re producing and running our biz to be consistent with that,” Lee said.