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CEO: Changing consumer behavior hurts Seneca Foods’ results

Seneca Foods Corp. reported a net loss for its fiscal fourth quarter of $1.7 million, or 17 cents a diluted share, compared with net earnings of $13.8 million, or $1.38 a diluted share, during the same period a year ago.seneca_foods_corp_logo

The Marion, Wayne County-based food processor and distributor reported its results after the market closed Thursday.

The decline stems from changes in consumer behavior, said Kraig Kayser, president and CEO.

“Fiscal year 2017 was a challenging year for us,” he said in a statement. “Our business faced many of the same top-line issues that are affecting other consumer packaged-food companies as retail shopping habits are shifting.

“When coupled with heavier than normal inventory levels due to good growing conditions, selling prices declined over the course of the year as the company took steps to get its inventory levels in line.”

Net sales dropped by $37.6 million—or 12.4 percent—to $266.1 million, compared with $303.7 million in 2016’s fiscal fourth quarter.

The decrease in sales is due to lower selling prices and a less favorable sales mix, the company said.

For the year, Seneca Foods reported net earnings of $12.6 million, or $1.27 a diluted share, compared with $54.5 million, or $5.42 a diluted share.  A significant portion of the net earnings decrease was attributable to a non-recurring pre-tax gain of $24.3 million that occurred in the prior year, the company said.

Net sales for the fiscal year ended March 31 decreased by 2.3 percent to $1.25 billion. The decrease is attributable to lower selling prices/less favorable sales mix of $86.9 million partially offset by increased sales volume of $57.2 million, primarily due to an acquisition in the third quarter of 2016.

Shares of Seneca Foods (NasdaqGS:Senea) were trading at $33.90 Friday morning—slightly down from Thursday’s close of $34.

Follow Kerry Feltner on Twitter: @KerryFeltner

(c) 2017 Rochester Business Journal. To obtain permission to reprint this article, call 585-363-7269 or email madams@bridgetowermedia.com.

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