Seneca Foods (SENE) Q2 2025 earnings summary

Executive summary

• Net sales for Q2 FY2025 increased 4.4% year-over-year to $425.5 million, driven by higher sales volumes, favorable product mix, and pricing.

• Net earnings for the quarter were $13.3 million, down from $24.8 million in the prior year quarter, reflecting margin compression from elevated costs.

• For the six months ended September 28, 2024, net sales rose to $730.2 million from $706.1 million year-over-year, with net earnings of $26.0 million, down from $47.9 million.

• Case volumes (excluding co-pack) rose 9.9% year-over-year for the first six months.

• Inventory reductions and unfavorable Midwest weather led to higher unit costs, but total cash outlays and working capital improved.

Financial highlights

• Gross margin for Q2 FY2025 was 10.1%, down from 14.3% in the prior year quarter; for six months, 11.7% vs. 16.1%.

• Operating income for the quarter was $24.7 million, a decrease from $38.4 million year-over-year; for six months, $50.1 million vs. $73.9 million.

• Adjusted net earnings (FIFO basis) for Q2 FY2025 were $24.6 million, compared to $31.8 million in the prior year quarter; for six months, $35.1 million vs. $53.6 million.

• EBITDA for the quarter was $38.5 million, with FIFO EBITDA at $53.5 million.

• Interest expense increased to $9.0 million for the quarter, reflecting higher rates and increased borrowings.

Outlook and guidance

• Management expects working capital needs to ease in FY2025 due to lower planned seasonal pack and normalization of inventory trends.

• The company anticipates sufficient liquidity to meet obligations, including the maturity of Term Loan A-1 in June 2025, through operating cash flows and access to credit facilities.

• Management expects continued positive volume momentum in core business.

• Higher unit costs anticipated due to inventory reductions and adverse weather, but cash outlays and working capital trends remain favorable.