Investors are salty on Snyder’s-Lance.
The US-based maker of snack brands including Kettle crisps, Snyder’s pretzels and Pop-Secret popcorn is headed for its biggest one-day drop in nearly seven years and its second largest drop on record on Monday after it lowered its yearly revenue guidance and replaced its chief executive.
The company’s shares are down almost 15 per cent after the announcements, which came as it reported preliminary results for the three-month period ending April 1. It said it expects revenue in the range of $530m-$532m and net income between $11m-$12m, translating to earnings per share of 11 to 12 cents.
Alex Pease, Snyder’s-Lance’s chief financial officer, said that while it saw sales and market-share growth in the majority of its categories, the growth had come at a “higher cost than planned”, including heavier spending on promotional and marketing activities, which had a negative impact on its earnings. It plans to announce final results for the quarter on May 8.
The drop-off — poised to be the steepest since May 5, 2010, according to Bloomberg data — also comes as current president and chief executive Carl Lee Jr leaves the top job after 12 years at the company. His interim replacement will be Brian Driscoll, former president and chief executive of Diamond Foods, which Snyder’s-Lance acquired in a $1.27bn deal announced in 2015, who currently serves as a director at Snyder’s-Lance. The company said it will launch a national search for a full-time successor for Mr Lee.
Under the new leadership, “we are moving aggressively to take the actions necessary to improve earnings,” Mr Pease said in a statement. “We are not satisfied with our early 2017 performance, and our organisation is laser-focused on improved execution and continuous improvement to return the business back to more expected levels of profitability.”
Snyder’s-Lance also snipped its full-year guidance for fiscal 2017. It said it is now expecting net revenue between $2.2bn to $2.25bn, from the $2.25bn to $2.29bn it had previously forecast, and earnings per diluted share from continuing operations, excluding special items, of $1.05-$1.20, versus its prior range of $1.32-$1.42.