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Lancaster Colony’s Stock Falls 11% after Fiscal 2Q16 Earnings

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LANC falls 11%

Lancaster Colony Corporation (LANC) reported its fiscal 2Q16 results on January 28 before the market opened, and the stock fell by ~11% on the day with revenue and earnings missing estimates. The stock was trading at $116.5 on the previous day and fell to $104.05 on January 28. It fell another 2% and closed at $101.68 on January 29.

The stock had reacted well to fiscal 1Q16 results and had risen by ~8%, closing at $113 on October 29, 2015. The stock has been on a rising trend since then and has traded in the range of $113–$118. The stock had also reacted positively after the company’s fiscal 4Q15 earnings release and had risen by ~2%. LANC has fallen by 11.9% on a YTD basis and by 14.3% on a trailing-five-day basis. The stock rose as much as 25% in 2015, but has fallen by 10% so far in 2016. The stock has risen by 3% in the last two months.

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Peers in the industry

Lancaster Colony manufactures and markets specialty food products for the retail and food service markets in the United States. It has its headquarters in Columbus, Ohio. Its key brands are Marzetti, Cardini’s, Simply Dressed, Katherine’s Kitchen, and Girard’s. The company’s other brands include Otria, Mamma Bella, Sister Schubert’s, Marshall’s, Inn Maid, and Amish Kitchen.

Its main competitors in the processed and packaged goods industry, in particular, are Mondelez International (MDLZ), Cal-Maine Foods (CALM), and General Mills (GIS). They closed at $43.10, $50.47, and $56.5, respectively, on January 29. The PowerShares Dynamic Food & Beverage Portfolio (PBJ) invests 3.1% of its holdings in LANC. The ETF also invests 5.0% of its portfolio in MDLZ, 2.5% of its portfolio in CALM, and 5.1% of its portfolio in GIS. The ETF closed at $31.57 on January 29 and has returned -2.0% YTD.

Series overview

In the next parts of this series, we’ll talk about the moving averages of Lancaster Colony and its peers, the company’s performance in its recently reported fiscal 2Q16, and its raised quarterly dividend. We’ll also have a look at what analysts recommend for the stock and further discuss what the company expects for fiscal 2016.

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