Specialty food company Lancaster Colony (NASDAQ:LANC) reported Q4 CY2024 results exceeding the market’s revenue expectations, with sales up 4.8% year on year to $509.3 million. Its GAAP profit of $1.78 per share was 8.2% below analysts’ consensus estimates.
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Lancaster Colony (LANC) Q4 CY2024 Highlights:
- Revenue: $509.3 million vs analyst estimates of $495.3 million (4.8% year-on-year growth, 2.8% beat)
- EPS (GAAP): $1.78 vs analyst expectations of $1.94 (8.2% miss)
- Operating Margin: 14.9%, up from 13.5% in the same quarter last year
- Sales Volumes rose 6% year on year (-1.9% in the same quarter last year)
- Market Capitalization: $4.59 billion
CEO David A. Ciesinski commented, “We were very pleased to complete the quarter with record sales, gross profit and operating income. The 6.3% increase in Retail segment net sales was driven by growth from both our licensing program and our own brands. In licensing, we had notable contributions from our recently introduced Texas Roadhouse® dinner rolls, as well as Buffalo Wild Wings® sauces, Subway® sauces and Olive Garden® dressings. In addition, our Marzetti® brand caramel dips and refrigerated dressings were noted contributors to the growth in Retail segment net sales. In the Foodservice segment, sales growth of 3.0% was led by higher demand from several of our core national chain restaurant accounts along with increased sales for our branded Foodservice products.”
Company Overview
Known for its frozen garlic bread and Parkerhouse rolls, Lancaster Colony (NASDAQ:LANC) sells bread, dressing, and dips to the retail and food service channels.
Shelf-Stable Food
As America industrialized and moved away from an agricultural economy, people faced more demands on their time. Packaged foods emerged as a solution offering convenience to the evolving American family, whether it be canned goods or snacks. Today, Americans seek brands that are high in quality, reliable, and reasonably priced. Furthermore, there's a growing emphasis on health-conscious and sustainable food options. Packaged food stocks are considered resilient investments. People always need to eat, so these companies can enjoy consistent demand as long as they stay on top of changing consumer preferences. The industry spans from multinational corporations to smaller specialized firms and is subject to food safety and labeling regulations.
Sales Growth
A company’s long-term sales performance can indicate its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years.
With $1.9 billion in revenue over the past 12 months, Lancaster Colony is a small consumer staples company, which sometimes brings disadvantages compared to larger competitors benefiting from economies of scale and negotiating leverage.
As you can see below, Lancaster Colony grew its sales at a mediocre 6.7% compounded annual growth rate over the last three years, but to its credit, consumers bought more of its products.
This quarter, Lancaster Colony reported modest year-on-year revenue growth of 4.8% but beat Wall Street’s estimates by 2.8%.
Looking ahead, sell-side analysts expect revenue to grow 2% over the next 12 months, a deceleration versus the last three years. This projection is underwhelming and indicates its products will see some demand headwinds.
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Volume Growth
Revenue growth can be broken down into changes in price and volume (the number of units sold). While both are important, volume is the lifeblood of a successful staples business as there’s a ceiling to what consumers will pay for everyday goods; they can always trade down to non-branded products if the branded versions are too expensive.
Lancaster Colony’s average quarterly volume growth was a healthy 1.7% over the last two years. This is pleasing because it shows consumers are purchasing more of its products. 
In Lancaster Colony’s Q4 2025, sales volumes jumped 6% year on year. This result was an acceleration from its historical levels, certainly a positive signal.
Key Takeaways from Lancaster Colony’s Q4 Results
It was encouraging to see Lancaster Colony beat analysts’ revenue expectations this quarter. We were also happy its gross margin outperformed Wall Street’s estimates. On the other hand, its EPS missed. Overall, this was a mixed quarter. The stock traded up 1% to $168.19 immediately following the results.
So do we think Lancaster Colony is an attractive buy at the current price? The latest quarter does matter, but not nearly as much as longer-term fundamentals and valuation, when deciding if the stock is a buy. We cover that in our actionable full research report which you can read here, it’s free.
