Lancaster Colony Corporation (NASDAQ:LANC) Q4 2024 Results Conference Call August 22, 2024 10:00 AM ET

Company Participants

Dale Ganobsik - VP, Corporate Finance and IR
Dave Ciesinski - President and CEO
Tom Pigott - CFO

Conference Call Participants

Tyler Prause - Stephens
Andrew Wolf - CL King
Brian Holland - D.A. Davidson
Connor Rattigan - Consumer Edge
Robert Dickerson - Jefferies
Todd Brooks - The Benchmark Company

Operator

Good morning. My name is Shannon, and I will be your conference call facilitator today. At this time, I would like to welcome everyone to the Lancaster Colony Corporation Fiscal Year 2024 Fourth Quarter Conference Call. Conducting today's call will be Dave Ciesinski, President and CEO; and Tom Pigott, CFO. All lines have been placed on mute to prevent any background noise. After the speakers have completed their prepared remarks, there will be a question-and-answer period [Operator Instructions].

And now to begin the conference call, here is Dale Ganobsik, Vice President of Corporate Finance and Investor Relations for Lancaster Colony Corporation.

Dale Ganobsik

Good morning, everyone. And thank you for joining us today for Lancaster Colony's fiscal year 2024 fourth quarter conference call. Our discussion this morning may include forward looking statements, which are subject to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements are subject to a number of risks and uncertainties that could cause actual results to differ materially, and the company undertakes no obligation to update these statements based upon subsequent events. A detailed discussion of these risks and uncertainties is contained in the company's filings with the SEC. Also note that the audio replay of this call will be archived and available on our company's Web site lancastercolony.com, later this afternoon. For today's call, Dave Ciesinski, our President and CEO, will begin with the business update and highlights for the quarter. Tom Pigott, our CFO, will then provide an overview of the financial results. Dave will then share some comments regarding our current strategy and outlook. At the conclusion of our prepared remarks, we'll be happy to respond to any of your questions. Once again, we appreciate your participation this morning. I'll now turn the call over to Lancaster Colony's President and CEO, Dave Ciesinski. Dave?

Dave Ciesinski

Thanks, Dale. And good morning, everyone. It's a pleasure to be here with you today as we review our fourth quarter results for fiscal year 2024. Before I provide my comments on our quarter, I am pleased to share that we completed fiscal year 2024, which ended June 30th with record net sales and gross profit. Net sales for the fiscal year grew 2.7% to $1.9 billion. Gross profit increased 11.3% to $432.3 million and the resulting gross profit margin improved 180 basis points to 23.1%. Turning to our fiscal fourth quarter results. Consolidated net sales declined 40 basis points to $452.8 million while gross profit grew 4.8% to $97.6 million. Operating income increased to $41.7 million, which includes the impact of restructuring and impairment charges that totaled $2.7 million in the current year quarter versus $25 million in last year's fourth quarter. All the restructuring and impairment charges are attributed to the perimeter of the store bakery product lines that we exited this past March. In our Retail segment, net sales declined 80 basis points to $234.2 million. Excluding all sales associated with the perimeter of the bakery lines that we exited, Retail segment sales increased 1.4% while the segment's volume, measured in pounds shipped, increased 1.2%. Our successful licensing program remained a catalyst for growth in the Retail segment. This was led by the newly introduced Subway sandwich sauces and Texas Roadhouse steak sauces, in addition to higher sales for Olive Garden dressings and Chick-fil-A refrigerated dressings.