In the face of “unanticipated operational challenges” related to its bakery in Philadelphia’s Navy Yard, Tasty Baking has now lowered its projected savings in the fourth quarter to $10 million from $13 million.
Tasty Baking also listed a bankruptcy filing by the owner of A&P, Super Fresh and Pathmark grocery chains, in addition to rising commodity prices as contributing to the financial pressure.
The company has hired an outside financial adviser to examine options including “a potential combination with another company as part of the consolidation occurring in the baking goods industry or a potential sale of the company,” Tasty Basking said in a statement.
Some of the company’s creditors have agreed to suspend debt payments related to the construction of a $78 million bakery and warehouse. Tasty Baking shares declined as much as 37% on Wednesday, according to the Associated Press.
Still, the company continues to expand its business, according to CEO Charles Pizzi.
“To that end, we continue to partner with new grocery and convenience store customers within our core markets, increase penetration with key customers, and launch new products into the marketplace,” he said. “Finally, despite the challenges we have faced, we have continued to outpace the category and grow our overall market share.”