Lassonde Industries Inc. (($TSE:LAS.A)) has held its Q2 earnings call. Read on for the main highlights of the call.
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Lassonde Industries Inc. recently held its earnings call, revealing a robust performance characterized by notable sales growth and market share gains. The sentiment during the call was largely positive, underscored by successful expansions across various segments. However, the company also acknowledged challenges, including declining gross profit margins, increased SG&A expenses, and construction delays at its New Jersey facility.
Strong Sales Growth
Lassonde Industries reported a remarkable 19% increase in sales, reaching $742 million. This growth was primarily driven by organic sales, which rose slightly above 10% when excluding foreign exchange impacts and contributions from Summer Garden.
Market Share Gains
The company achieved significant market share gains in both Canada and the U.S. This success was attributed to a robust product portfolio that resonated well with consumers, enhancing Lassonde’s competitive position in the market.
U.S. Beverage Activities Improvement
Lassonde’s U.S. beverage activities saw a notable improvement, with a 10% increase in production volume compared to the previous year. This boost supported enhanced distribution efforts and the successful launch of a single-serve line in North Carolina.
Foodservice Expansion
The company’s Foodservice segment experienced a double-digit sales increase, driven by strong growth in the U.S. and improved penetration of national accounts in Canada, showcasing Lassonde’s strategic expansion efforts.
Specialty Food Success
Summer Garden, a key part of Lassonde’s specialty food segment, delivered a solid quarter with sales of $49.9 million and an impressive EBITDA margin of 21%. The company continues to focus on integration and brand distribution efforts.
Gross Profit Margin Decline
Despite the positive sales growth, Lassonde reported a decline in gross profit margin from 28.1% to 26.4%. This decrease was attributed to higher costs of certain inputs, including oranges, pineapples, and apples.
SG&A Expenses Increase
SG&A expenses rose to $141 million, up from $126 million the previous year. This increase was partly due to higher transportation and warehousing costs, impacting the company’s overall profitability.
Operating Activities Cash Outflow
Lassonde’s operating activities resulted in a cash outflow of $3 million in Q2 2025, primarily due to increased working capital requirements and higher interest and income taxes paid.
Construction Delays in New Jersey Facility
The construction of Lassonde’s New Jersey facility has been delayed due to permitting issues, pushing capital expenditures to 2026 and 2027, which may impact future operational capabilities.
Forward-Looking Guidance
Looking ahead, Lassonde Industries provided an optimistic outlook, expecting sales to rise slightly above 10% for the full year. This forecast is supported by strategic investments and pricing adjustments, despite the ongoing volatility in costs for orange, apple, and pineapple concentrates. The company also noted a 13% increase in adjusted EBITDA to $84 million, although adjusted profit saw a slight decline to $37 million.
In conclusion, Lassonde Industries Inc.’s earnings call highlighted a strong performance with significant sales growth and market share gains. Despite facing challenges such as declining profit margins and increased expenses, the company remains optimistic about its future prospects, driven by strategic investments and market expansion efforts.