Lifeway Foods, Inc., the leading U.S. supplier of organic and non-organic kefir cultured dairy products, on Monday reported a second quarter net loss of $141,000, or -$0.01 per share, on sales of $23.2 million, down 14.6 percent.
The Morton Grove, Ill.-based company (Nasdaq: LWAY) produces drinkable kefir, which comprises 77 percent of its total sales, cupped kefir and cheese, frozen kefir, specialty cheeses, yogurt, probiotic supplements and a ProBugs line for kids.
Lifeway said the second quarter “net sales softness continued to reflect the overall lower consumption in the dairy and cultured dairy product categories. Versus prior year, the decline was primarily driven by lower volumes of our branded drinkable kefir and cupped kefir and Skyr sales, partially offset by the incremental volume of new item introductions.”
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Gross profit as a percentage of net sales for the quarter ended June 30 was 24 percent, down from 25.4 percent for last year’s second quarter.
“The decline versus the prior year was primarily due to the unfavorable impact of operating leverage that arises from lower net sales relative to fixed costs, partially offset by a reduction in variable costs,” the company said. “Additionally, depreciation expense increased reflecting the continued investment in manufacturing improvements.”
Lifeway’s total losses for 2019 are now at $529,000, or -$0.03 per share.
Shares of Lifeway closed Monday at $2.66, up 6 percent, just before the second quarter results were announced. The stock was down more than 11 percent in pre-market trading Tuesday.
The company’s stock has a 52-week low of $1.81 and a 52-week high of $4.75. Lifeway has a market cap of $42 million. Since March 2015, when the company’s shares hit an all-time high of $21.90, Lifeway has shown a consistent decline, especially with recent drops in revenue and squeezed margins.
For all of 2018, Lifeway reported a $3.1 million loss for 2018 on sales of $103.4 million, down 13 percent. For all of 2017, Lifeway reported a loss of $346,000 on sales of $118.9 million, down 4 percent.
Since 1999, France-based Danone S.A., the world’s largest yogurt producer, has owned 22 percent of Lifeway’s stock. The Smolyansky family, including Ludmila, Julie, and her brother Edward, own the majority of Lifeway’s common stock.