Lifeway Foods, Inc. (NASDAQ:LWAY) Q3 2023 Earnings Call Transcript
Lifeway Foods, Inc. (NASDAQ:LWAY) Q3 2023 Earnings Call Transcript November 13, 2023
Lifeway Foods, Inc. beats earnings expectations. Reported EPS is $0.23, expectations were $0.16.
Operator: Good morning. Welcome to Lifeway Foods' Third Quarter 2023 Earnings Conference Call. On the call with me today is Julie Smolyansky, President and Chief Executive Officer. By now, everyone should have access to the press release that went out this morning. If you have not received the release, it is available on the Investor Relations portion of Lifeway's website at www.lifewayfoods.com. A recording of this call will be available on the company's website. Before we begin, we would like to remind everyone that the prepared remarks contain forward-looking statements. The words believe, expect, anticipate and other similar expressions generally identify forward-looking statements. These statements do not guarantee future performance, and therefore, undue reliance should not be placed on them.
Actual results could differ materially from those projected in any forward-looking statements. Lifeway assumes no obligation to update any forward-looking projections that may be made in today's release or call. All of the forward-looking statements contained herein speak only as of the date of this call. And with that I'd like to turn the call over to Lifeway's Chief Executive Officer, Julie Smolyansky.
Julie Smolyansky: Thank you, John, and good morning to everyone joining us today. As always, we greatly appreciate your interest in Lifeway Foods. I'm excited to report a phenomenal start to the second half of 2023 as we once again set a company record for net sales and continue to deliver vastly improved profitability. Our results are a testament to the sound execution of our entire Lifeway team and I could not be more pleased with their efforts. With that, I will now review our third quarter 2023 results. Net sales were $40.9 million for the period ended September 30, 2023, an increase of $2.8 million or 7.2% compared to the third quarter in 2023. The increase was primarily driven by higher volumes of our Lifeway branded drinkable kefir and to a lesser extent, the impact of price increases implemented during the fourth quarter of 2022.
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We are encouraged to see our growth driven by volumes yet again, more so than pricing with continued accelerating unit velocities in our flagship Lifeway Kefir line. This once more demonstrates widespread acceptance of our inflation justified price increases as our loyal and new customers maintain their commitment to our better-for-you high-quality product offerings. This was our 16th consecutive quarter of strong year-over-year growth, our second consecutive quarter setting a Lifeway record for total net sales. The growth this quarter was even more notable when considering that the third quarter of 2022 was now our third largest quarter ever. When compared to the third quarter of 2021, we were up 38.4%. The year-over-year lapse will continue to become more difficult, yet we are excited by the challenge to continue growing.
Further underscoring the strong sales we delivered is the environment in which we delivered that. It's no secret that the current US macro environment is challenging consumers. A number of factors, including high interest rates, the reinstatement of student loan repayments, inflation, among others are weighing on consumer optimism and they are becoming more price sensitive. Despite that and in light of the price increases we implemented in the fourth quarter of 2022, our loyal customers continue to affirm our belief that Lifeway's premium product offering comes at a great value illustrated by our great consumption trends and velocities in our key retailers. Moving on, we reported a gross profit margin of 27.2% for the period ended September 30, 2023, increasing 730 basis points compared to 19.9% in the third quarter of 2023.
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