Lancaster Colony reports higher sales despite restaurant-unit weakness

A troubled restaurant industry stole the wind from Lancaster Colony’s sails.

The Westerville-based maker of Marzetti salad dressings and various breads and other food products reported a decline of sales in the division that services restaurant chains and foodservice companies. It blamed reduced traffic and declining same-store sales across the restaurant industry, especially in the casual-dining segment.

Although Lancaster Colony has tried to shed less-profitable food-service accounts, it can’t shake industry-wide trends.

“It’s like the laws of gravity,” said CEO David Ciesinski during an earnings call with analysts. “We will all be tied to what happens to traffic.”

Lancaster Colony reported sales of $289.9 million, up from $284.5 million in the fourth quarter a year ago. However, net income slipped to $28.5 million, or $1.04 per share, from $30.6 million, or $1.12 per share, a year ago.

For the fiscal year, it reported record sales of $1.20 billion, up from $1.19 billion a year ago. Net income came to $115.3 million, or $4.20 per share, compared with $121.8 million, or $4.44 per share, in the previous year.

Although sales increased, they failed to match Wall Street expectations.

The entire decline in profitability was attributed to a one-time charge, taken earlier this fiscal year, related to the exit of a multi-employer pension plan.

Ciesinski, who took over the CEO role this year from long-time executive John Gerlach, said the company plans to wring costs from its supply chain, invest in growing its latest acquisition, Angelic Bakehouse, and launch some new products.

The company’s shares closed at $115.11, down $9.30 or 7.5 percent.