Lassonde Lifts Q3 Profit to C$41 Million as Sales Slip to C$713 Million

Adjusted profit attributable to shareholders rose to C$41 million, or C$5.94 per share, from C$40 million, or C$5.84 per share, a year earlier — a gain of roughly 1.7% at the per-share line, delivered on sales that went the other way. Lassonde Industries (TSE:LAS.A) posted third-quarter revenue of C$713 million for the quarter ended Sept. 26, 2026, down from C$724 million a year earlier. Exclude a favorable currency effect, and sales fell 2.3%, Chief Financial Officer Francis Trudeau said on the earnings call.

The margin picture split in two. Gross profit climbed to C$206 million from C$198 million, helped by lower orange and apple commodity costs and a richer sales mix. Adjusted EBITDA moved against that grain, slipping to C$84 million, or 11.7% of sales, from C$86 million, or 11.9%. Higher conversion costs, PET resin costs and lower volumes took back part of the commodity benefit. Selling, general and administrative expenses rose C$9 million to C$149 million, mostly on transportation.

What broke at the plants?

Chief Executive Officer Vince Timpano said mechanical problems shut a single-serve line in North Carolina for approximately 20 days. Aging equipment at the existing New Jersey facility caused temporary disruptions and what he called suboptimal production. The company shifted output to other plants, including facilities in Canada, to keep customers supplied — a fix that raised conversion and freight costs and, by management's own account, limited the pursuit of growth opportunities, particularly in single-serve formats.

Trudeau declined to quantify the disruptions' effect on quarterly EBITDA. He named conversion costs and freight as the main components, and he cautioned that suboptimal production could continue to weigh on the fourth quarter. The North Carolina line was improving but still running at a reduced rate; asked whether the issue would be resolved by year-end, both Trudeau and Timpano said yes.

The New Jersey answer is a US$200 million project, on track and on budget according to Timpano. Transfer to the new facility should begin near the end of the fourth quarter and run through most of 2027. Trudeau said the move cannot be accelerated: the facility is still being built and lines will relocate sequentially. Lassonde intends to exclude usual startup costs from adjusted EBITDA and adjusted EPS, treating them as items affecting comparability — a promise worth watching when those exclusions start appearing in the tables.

What does the outlook hold?

Management reiterated that fiscal 2026 sales should land slightly below the prior year's level, excluding foreign exchange effects. Trudeau said affordability concerns will likely keep consumer demand and volumes under pressure in the coming months. Higher crude oil prices should continue to press on transportation and PET resin costs, partly offset by favorable commodity costs; the benefit from cheaper oranges and apples, he added, has already been significantly offset by other expenses.

A second pressure point sits in 2027. Contractual changes involving an important specialty food customer will affect that year's sales. Lassonde has secured approximately 70% of the replacement volume for 2027 and is negotiating the rest — but management conceded it remains uncertain whether the volume can be replaced on historical business terms. Timpono said most of the secured replacement volume comes from new third-party relationships, not existing ones.

Brand performance was mixed. In the United States, Apple & Eve gained distribution with national retailers in the Midwest and West, and reduced-sugar juice boxes extended the brand into certain channels; U.S. brands gained share while private label merely tracked the category. In Canada, Oasis gained volume and share in chilled beverages, though shelf-stable volumes suffered from retailers' changed promotional strategies, and overall Canadian share has recently declined — remaining above 2024 levels and improving in the latest four-week period. G. Hughes non-barbecue specialty sauces delivered double-digit sales growth even as the brand met tougher competition in U.S. barbecue sauce. Third-party premium and super-premium pasta sauce brands grew volumes in both countries.

Where does the cash stand?

Operating activities generated C$63 million, down from C$118 million a year earlier, on working-capital movements. Capital expenditures totaled C$55 million in the quarter; management still projects 2026 spending near 7% of sales, including approximately C$87 million for New Jersey. Trudeau said 2027 capital spending will stay above the historical range but fall below 2026 as a share of sales. Net debt stood at C$456 million at quarter-end, a net debt-to-adjusted-EBITDA ratio of 1.25 to 1. Since reinstating buybacks in August, Lassonde has repurchased more than 68,000 shares for C$15.8 million.

A profit increase built on falling sales, unsized disruption costs and an unquantified customer gap leaves the burden of proof on the fourth quarter.