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1. Company Snapshot

1.a. Company Description

Lancaster Colony Corporation manufactures and markets food products for the retail and foodservice markets in the United States.The company operates in two segments, Retail and Foodservice.It offers frozen garlic bread under the New York BRAND Bakery; frozen Parkerhouse style yeast and dinner rolls under the Sister Schubert's brand; salad dressings under the Marzetti, Cardini's, and Girard's; flatbread wraps and pizza crusts under the Flatout brand; croutons and salad toppings under the New York BRAND Bakery, Chatham Village, and Marzetti; frozen pasta under the Marzetti Frozen Pasta brand; and vegetable and fruit dips under the Marzetti brand.


In addition, it manufactures and sells other products to brand license agreements, including Olive Garden dressings, Buffalo Wild Wings sauces and Chick-fil-A sauces.The company sells its products through sales personnel, food brokers, and distributors to retailers and restaurants.Lancaster Colony Corporation was incorporated in 1961 and is based in Westerville, Ohio.

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1.b. Last Insights on LANC

Lancaster Colony Corporation's recent performance was driven by several positive factors. The company's long history of dividend growth, although slowing, has contributed to its strong track record. The appointment of Judith Mondello as Chief Research, Development and Quality Officer at T. Marzetti Company, a subsidiary of Lancaster Colony, is a strategic move to enhance product innovation and quality assurance. Additionally, the company's recent announcement of a new plant expansion is expected to boost production capacity and efficiency.

1.c. Company Highlights

2. Marzetti's Q1 FY2026 Earnings: A Strong Start to the Year

The Marzetti Company reported a robust first quarter, with consolidated net sales increasing 5.8% to a record $493 million, driven by strong performances in both Retail and Foodservice segments. Excluding noncore sales, adjusted net sales grew 3.5% to $483 million. Gross profit reached $119 million, a first-quarter record, and operating income expanded to $59 million. The company's actual EPS came in at $1.71, beating estimates. The gross margin expansion of 80 basis points, excluding the temporary supply agreement, was a notable highlight, demonstrating the company's ability to manage costs and maintain profitability.

Publication Date: Nov -06

📋 Highlights
  • Consolidated Net Sales Growth: Achieved $493 million, a 5.8% increase YoY.
  • Record Gross Profit: Reached $119 million, up 7.2% from the prior year quarter.
  • Adjusted Gross Margin Expansion: Expanded by 80 basis points excluding temporary supply agreement sales.
  • Foodservice Volume Growth: Volume measured in pound shifts increased 0.5% despite adjusted net sales growth of 3.5%.
  • Chick-fil-A Retail Sales: Grew to $200–220 million, driven by club channel and core Retail expansion.

Segment Performance

In the Retail segment, net sales increased 3.5%, driven by category-leading New York Bakery frozen garlic bread products. Circana scanner data showed strong performance for several core brands and licensed items, with the Frozen Dinner Roll and Frozen Garlic Bread categories growing sales by 27.4% and 8.6%, respectively. In Foodservice, excluding noncore TSA sales, adjusted net sales grew 3.5%, with volume measured in pound shifts increasing 0.5%. As Dave Ciesinski noted, "We expect to benefit from sales to select quick service restaurant customers in our mix of large national accounts," indicating a positive outlook for the segment.

Valuation and Outlook

With a P/E Ratio of 28.09 and an EV/EBITDA of 16.75, Marzetti's valuation suggests that the market is pricing in moderate growth expectations. Analysts estimate next year's revenue growth at 2.5%, which may be a conservative estimate given the company's strong first-quarter performance. The Dividend Yield of 2.19% and Free Cash Flow Yield of 6.58% indicate that the company is returning value to shareholders while maintaining a healthy cash flow position. As Marzetti continues to invest in its business and drive growth through innovation, the company's ROE of 17.01% and ROIC of 11.23% demonstrate its ability to generate strong returns on capital.

Consumer Trends and Innovation

Despite the challenging market environment, Marzetti's focus on innovation and flavor has enabled the company to drive growth. Products like New York Bakery garlic toast and Sister Schubert's Texas Roadhouse roll have gained significant market share, offering affordable luxuries to consumers. As the company continues to leverage its innovation capabilities, it is well-positioned to maintain its growth momentum, even in a soft consumer environment.

3. NewsRoom

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Lancaster Colony: The New Plant And Partnership Growth Don't Outweigh Stagnation Risks

Jun -23

Source: seekingalpha.com

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T. Marzetti Company Names Judith Mondello Chief Research, Development and Quality Officer

Jun -09

Source: businesswire.com

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Lancaster Colony: Q3 Reflects The Impact Of Consumer Weakness

May -06

Source: seekingalpha.com

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Lancaster Colony Corporation (LANC) Q3 2025 Earnings Call Transcript

Apr -30

Source: seekingalpha.com

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Lancaster Colony (LANC) Misses Q3 Earnings and Revenue Estimates

Apr -30

Source: zacks.com

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Lancaster Colony Reports Third Quarter Sales and Earnings

Apr -30

Source: businesswire.com

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2025 Dividend Kings: Weathering Tariff Volatility Better Than The Market

Apr -23

Source: seekingalpha.com

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Lancaster Colony to Webcast Third Quarter Fiscal Year 2025 Conference Call

Apr -16

Source: businesswire.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (2.03%)

6. Segments

Retail

Expected Growth: 2.5%

Lancaster Colony Corporation's Retail segment growth of 2.5% is driven by increasing demand for specialty foods, expansion of e-commerce channels, and strategic acquisitions. Additionally, the company's focus on product innovation, marketing initiatives, and strong relationships with retailers contribute to its growth momentum.

Foodservice

Expected Growth: 1.5%

Lancaster Colony Corporation's Foodservice segment growth of 1.5% is driven by increasing demand for convenient and portable food options, expansion of distribution channels, and strategic acquisitions. Additionally, the company's focus on innovation, quality, and customer service has enabled it to maintain market share and capitalize on emerging trends in the foodservice industry.

7. Detailed Products

Frozen Pies and Cakes

Lancaster Colony Corporation offers a wide range of frozen pies and cakes under its Gaiser's brand, which are sold to foodservice and retail customers.

Frozen Breads and Rolls

The company produces frozen breads and rolls under its frozen bread brand, which are sold to foodservice and retail customers.

Canned and Frozen Meat Products

Lancaster Colony Corporation offers canned and frozen meat products, including bacon, ham, and sausage, under its New York Style brand.

Frozen Snacks and Appetizers

The company produces frozen snacks and appetizers, including onion rings, cheese sticks, and breadsticks, under its New York Style brand.

Specialty Foods

Lancaster Colony Corporation offers specialty foods, including salad dressings, sauces, and condiments, under its New York Style brand.

8. Lancaster Colony Corporation's Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Lancaster Colony Corporation is moderate, as there are some alternatives available in the market, but they are not very attractive to customers.

Bargaining Power Of Customers

The bargaining power of customers for Lancaster Colony Corporation is low, as customers have limited options and the company has a strong brand presence.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Lancaster Colony Corporation is moderate, as the company relies on a few key suppliers, but has some flexibility in its supply chain.

Threat Of New Entrants

The threat of new entrants for Lancaster Colony Corporation is high, as the industry has low barriers to entry and new companies can easily enter the market.

Intensity Of Rivalry

The intensity of rivalry for Lancaster Colony Corporation is high, as the industry is highly competitive and companies are constantly competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 3.36%
Debt Cost 3.95%
Equity Weight 96.64%
Equity Cost 5.91%
WACC 5.84%
Leverage 3.48%

11. Quality Control: Lancaster Colony Corporation passed 7 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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Lancaster Colony

A-Score: 5.7/10

Value: 3.6

Growth: 5.9

Quality: 7.1

Yield: 4.0

Momentum: 4.0

Volatility: 9.3

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Growth: 4.0

Quality: 5.5

Yield: 7.0

Momentum: 1.0

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Value: 5.1

Growth: 5.0

Quality: 5.8

Yield: 6.0

Momentum: 0.5

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McCormick

A-Score: 5.0/10

Value: 3.3

Growth: 4.2

Quality: 6.1

Yield: 5.0

Momentum: 2.5

Volatility: 9.0

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Simply Good Foods

A-Score: 4.2/10

Value: 5.6

Growth: 5.4

Quality: 6.6

Yield: 0.0

Momentum: 1.0

Volatility: 6.7

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BellRing Brands

A-Score: 3.1/10

Value: 5.4

Growth: 2.7

Quality: 6.1

Yield: 0.0

Momentum: 0.5

Volatility: 3.7

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

172.77$

Current Price

172.77$

Potential

-0.00%

Expected Cash-Flows