Lifeway Foods, Inc. LWAY posted third-quarter 2024 results, with the top line increasing year over year but falling short of the Zacks Consensus Estimate. Meanwhile, the bottom line declined year over year and missed the consensus mark as well. 

Lifeway Foods marked its 20th consecutive quarter of net sales growth. The quarter marked the second-highest quarterly net sales in the company's history, driven by the strong performance of its flagship product, Lifeway Kefir. Looking ahead, Lifeway intends to strategically explore opportunities to boost the visibility of its core offerings, as consumer interest in protein-rich and probiotic foods, like Lifeway Kefir and Farmer Cheese, continues to grow.

LWAY’s Quarterly Performance: Key Metrics and Insights

Lifeway Foods posted earnings of 19 cents per share, which missed the Zacks Consensus Estimate of 27 cents. Also, the bottom line decreased from 23 cents reported in the year-ago quarter.

Find the latest EPS estimates and surprises on Zacks Earnings Calendar.

Lifeway Foods, Inc. Price, Consensus and EPS Surprise

Lifeway Foods, Inc. price-consensus-eps-surprise-chart | Lifeway Foods, Inc. Quote

The company reported consolidated net sales of $46.1 million, which missed the Zacks Consensus Estimate of $52 million. However, the metric increased 12.7% from $40.9 million posted in the year-ago period. The year-over-year growth was driven by increased volumes of the branded drinkable kefir.

Lifeway Foods’ gross profit increased 6.5% year over year to $11.9 million. However, the gross margin contracted 150 basis points (bps) to 25.7% compared with 27.2% in the third quarter of fiscal 2023. The gross margin decline was due to unfavorable milk pricing, partially offset by favorable transportation costs.

Selling expenses rose 38% year over year to $4 million in the quarter. As a percentage of net sales, selling expenses increased 150 bps year over year to 8.6%. This increase is fueled by the continued investments in marketing activities.

General and administrative expenses increased 15.5% year over year to $3.6 million in the quarter. As a percentage of net sales, general and administrative expenses increased 20 bps year over year to 7.7%.

LWAY’s Financial Health Snapshot

Lifeway Foods exited the quarter with cash and cash equivalents of $20.6 million and total shareholders’ equity of $71.5 million. In the nine months ended Sept. 30, 2024, net cash provided by operating activities was $15.5 million.

Sneak Peek Into LWAY’s Path Ahead

Lifeway Foods expects its ProBugs product to secure additional distribution in approximately 260 stores with a regional retailer by December 2024 and its Farmer Cheese is anticipated to be placed in about 1,400 stores with a major national retailer by the end of the first quarter of 2025. 

This Zacks Rank #3 (Hold) stock has gained 19% in the past three months against the industry’s 17.1% decline.

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INGR has a trailing four-quarter earnings surprise of 9.5%, on average. The Zacks Consensus Estimate for Ingredion’s current-financial year’s earnings indicates growth of 12.5% from the year-ago reported number.

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The Zacks Consensus Estimate for Freshpet’s current-fiscal year’s sales and earnings implies growth of 27.3% and 224.3%, respectively, from the year-ago reported number.

McCormick & Company, Incorporated MKC is a leading manufacturer, marketer and distributor of spices, seasonings, specialty foods and flavors to the entire food industry. It currently carries a Zacks Rank #2. MKC has a trailing four-quarter earnings surprise of 13.8%, on average.

The Zacks Consensus Estimate for McCormick’s current fiscal-year sales and earnings indicates growth of 0.6% and 8.2%, respectively, from the prior-year reported levels.

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