Snyder’s Grows Profits On Lower Private Label Sales
Snyder’s-Lance reported net sales for the first quarter rose 6.5 percent from a year earlier, though its private label sales fell about 1.4 percent in the quarter from the previous year.
But the snack maker of chips, pretzels, crackers and more said that the lower private label sales in the quarter were planned, as price increases to grow margin on the products were implemented effectively. Operating margins overall rose from 5 percent a year ago to 8.1 percent in the first quarter of 2013.
“We were really working to try to enhance the margins of those lines, we've been busy doing that,” CEO Carl Lee told analysts on a conference call announcing earnings, according to transcripts of the call from Seeking Alpha. “And so I think that, overall, we're kind of achieving what we – our first objective which is, again, the profitability of those items. And as we do that, we're probably going to see a little bit of bumpiness on the top line. But I'd much rather see progress fast and furious on the bottom line, which we're achieving, than I would on the top line.”
Chief Financial Officer Rick Puckett reminded analysts that the company had been changing the product lineup in private label since the first quarter of last year, as well.
“As you'll remember last year, we talked to you about optimizing that portfolio of products and customers,” he said, according to the Seeking Alpha transcripts. “And that kind of started in the first quarter of last year, so we're lapping a little bit of that, having already accomplished that. We have, in fact, replaced a lot of that business with more effective and beneficial business, but there is a good side of growth on our private brands business as well.”