Lassonde warns of inflationary pressure after delivering Q2 results
The Canada-based manufacturer of name brand and private-label beverages is up against labour and transportation costs and says it will adjust accordingly
Zachary Russell for Store Brands
Lassonde Industries Inc. recently reported $469.3 million in sales in its second quarter, a 5.8% drop from a year ago, marking the second straight negative quarter for the Quebec-based company.
Excluding a $32.8 million unfavourable foreign exchange impact, sales were up 0.8% year over year. Lassonde’s operating profit for the second quarter of 2021 totalled $29.9 million, down $12.8 million from $42.7 million in operating profit in the same quarter last year. The 2021 second quarter profit attributable to the company's shareholders totalled $18.8 million, down $7.2 million year over year.
“Like other players in the industry, the company is facing a series of challenges such as labour scarcity, raw material availability, and inflationary pressures that are affecting transportation and input costs,” said Nathalie Lassonde, chief executive officer and vice chairman of the board of directors of Lassonde Industries Inc., in a press release.
“We have gradually adjusted our selling prices to neutralize the impacts of these factors on our profitability, but further adjustments will be necessary as inflationary pressures intensify. I am confident, however, that our teams will demonstrate the agility needed to navigate such an environment and to help the company overcome these challenges,” she added.
Lassonde’s financial expenses went from $4.5 million in the second quarter of 2020 to $2.8 million in the second quarter of 2021, due to a decrease in the interest expense on long-term debt resulting from a lower debt level.
The company noted a slight increase in industry sales volumes in the U.S. and Canadian fruit juice and drink markets for the three-month period ended July 3, when compared to the same period in 2020, which reflected a more significant increase compared to the equivalent period in 2019.
Excluding foreign exchange impacts, the company's sales were up 1.5% in the first six months of 2021 compared to the same period last year.
The company’s brands include Apple & Eve, Everfresh, Fairlee, Fruité, Graves, Oasis, Old Orchard, Rougemont and Sun-Rype.