SunOpta, the Eden Prairie-based maker of plant-based foods and beverages, recorded another quarter with a double-digit sales increase but a bigger loss on the balance sheet, mainly because of its sunflower divestiture.
Eden Prairie's SunOpta records another quarterly loss, mainly because of sunflower divestiture
The maker of plant-based foods and beverages exceeded analyst expectations in the third quarter and raised outlook for the year, but its stock sank.
November 10, 2022 at 11:22PM
Its shares fell 16% Thursday on a day that saw the biggest one-day stock market gains since 2020.
Still, the company raised its guidance for the rest of the year, and Chief Executive Joe Ennen said the company was on track with three straight quarters of double-digit revenue gains and continues to expand its capacity.
The company lost $13.4 million, or 12 cents a share, on revenue of $229.7 million. The net loss in the third quarter of 2021 was $3.8 million, or 4 cents a share, the company said after the markets closed on Wednesday.
Earnings adjusted for the sunflower business sale and an after-tax gain on the sale of the Oxnard frozen fruit facility of $2.7 million, were $2 million, or 2 cents a share, which beat Wall Street estimates.
SunOpta sold its sunflower business in October for $16 million, allowing the company to focus on its faster-growing plant-based milk products, Ennen said. The milks are in 53% of U.S. households.
"Plant-based milks is a $3 billion category in the U.S. with a 10-year CAGR [compound annual growth rate] of approximately 8% and the underlying drivers of the sustained growth are incredibly durable," Ennen told analysts on the earnings call.
Ennen said in an interview that the company's $125 million, 200,000-square-foot plant-based milk factory in Midlothian, Texas, will be up and running by the end of the year.
As that plant ramps up production in 2023, it will not only allow more production of its milks, but also will allow the company to develop new varieties, Ennen said. The location also will allow SunOpta to expand its geographic distribution and save on supply chain costs.
The company is now expecting full-year 2022 revenue to be between $923 million and $943 million, after taking out $17 million of revenue associated with the sunflower business.
SunOpta makes plant-based milks from almonds, coconut, oats and soybeans. SunOpta's oat business grew enough in the quarter to make it the No. 1 ingredient its portfolio, exceeding almonds.
Almond milk is the most popular alternative milk, but SunOpta's oat milk is now 21% of its plant-based milk portfolio, officials said.
Ennen said its food and beverage segment is growing faster — 20% in the quarter — than the market as a whole.
Pricing increases contributed to much of the growth, the company said, with a small increase attributed to volume and mix in the plant-based side and a small decline attributed to volume and mix on the fruit-based side.
Despite the stock drop on Thursday, SunOpta is one of the few Minnesota-based public companies that has a higher stock price now than at the beginning of the year. Shares of other consumer goods companies such as the Hershey Co., J.M. Smucker Co., General Mills and Conagra were also down on a day when the S&P 500 index was up over 7% and a CPI report showed inflation was easing.
The Birds Eye plant recruited workers without providing all the job details Minnesota law requires.
