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Friday’s Consumer Pops and Drops: TM, EL, NKE, FLO, and CAG

PART:
1 2 3 4 5 6 7 8 9 10 11 12 13 14
Part 5
Friday’s Consumer Pops and Drops: TM, EL, NKE, FLO, and CAG PART 5 OF 14

Snyder’s-Lance Appoints Pease as Executive Vice President

Price movement

Snyder’s-Lance (LNCE) has a market cap of $3.3 billion. It fell 1.8% to close at $34.10 per share on September 23, 2016. The stock’s weekly, monthly, and year-to-date (or YTD) price movements were 1.3%, -3.3%, and 0.92%, respectively, on the same day. LNCE is trading 1.5% below its 20-day moving average, 1.8% below its 50-day moving average, and 4.3% above its 200-day moving average.

Snyder&#8217;s-Lance Appoints Pease as Executive Vice President

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Related ETFs and peers

The iShares Russell 2000 Value ETF (IWN) invests 0.34% of its holdings in LNCE. The ETF tracks an index of US small-cap value stocks. The index selects value stocks from a universe of stocks ranked 1,001–3,000 by market cap. The YTD price movement of IWN was 15.4% on September 23.

The iShares Russell 2000 ETF (IWM) invests 0.17% of its holdings in LNCE. The ETF tracks a market-cap-weighted index of US small-cap stocks. The index selects stocks ranked 1,001–3,000 by market cap.

The market caps of Snyder’s-Lance’s competitors are as follows:

  • PepsiCo (PEP) — $154.8 billion
  • J&J Snack Foods (JJSF) — $2.2 billion

Latest news on Snyder’s-Lance

Alexander Pease has been appointed as Snyder’s-Lance’s executive vice president and chief financial officer, effective November 1, 2016.

Performance in 2Q16

Snyder’s-Lance reported 2Q16 net revenue of $609.5 million, a rise of 41.3% from the net revenue of $431.4 million in 2Q15. The company’s gross profit margin and EBIT (earnings before interest and tax) rose 2.0% and 36.9%, respectively, between fiscal 2Q15 and fiscal 2Q16. It reported impairment charges of $0.49 million in 2Q16.

LNCE’s net income rose to $19.7 million and its EPS (earnings per share) fell to $0.20 in 2Q16, compared with $17.3 million and $0.24, respectively, in 2Q15. It reported adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) and adjusted EPS of $78.6 million and $0.28, respectively, in 2Q16, rises of 56.6% and 3.7% from 2Q15.

Snyder’s-Lance’s cash and cash equivalents fell 3.6% and its inventories rose 106% between 4Q15 and 2Q16. Its current ratio fell to 1.7x and its DE (debt-to-equity) ratio rose to 1.1x in 2Q16, compared with 2.2x and 0.63x, respectively, in 4Q15.

Projections

LNCE expects net revenue of $2.29 billion–$2.33 billion in 2016. This excludes contributions from Diamond Foods’ net revenue growth of flat to 2%.

Diamond Foods’ revenue contribution of ~$630 million–$650 million for the ten months starting on February 29, 2016, reflects the negative impact of unfavorable foreign currency and the net price realization from lower commodity costs.

The company’s other 2016 projections include the following:

  • adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of $313 million–$325 million
  • capital expenditure of $80 million–$85 million
  • EPS of $1.22–$1.30 (excluding special items and charges from the Diamond Foods acquisition, but including the impact of -$0.10 to -$0.12 per share from purchase accounting adjustments)
  • net interest expense of $33 million–$35 million
  • effective tax rate of 34%–35%

LNCE expects its EPS to be in the range of $0.28–$0.31 in 3Q16. Next, let’s look at Domtar (UFS).

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