SunOpta, Inc. (USA) (NASDAQ: STKL) recently expanded its voluntary recall of what management described as a limited number of sunflower kernel products. The development didn’t go down well with investors and the stock took a turn for the worst. However, the impact on the stock could be short-lived as the market digests the details and understands that a voluntary recall doesn’t normally come with the burden of a forced recall.
Expanded product recall
Although SunOpta, Inc. (USA) (NASDAQ: STKL)’s voluntary recall remains focused on a specific the line of sunflower kernel products, the company said it was expanding the coverage date for the recall. Initially, the company was only recalling the sunflower kernel products produced between Feb. 1, 2016 and Feb. 19, 2016. Management said the reason for the recall was that they were concerned that the products could be at risk of getting contaminated by Listeria monocytogenes.
The expanded recall now captures the cited sunflower kernel products manufactured between Feb. 20, 2016 and April 21, 2016.
Reason for the recall
According to SunOpta, Inc. (USA) (NASDAQ: STKL), Listeria monocytogenes contamination can be deadly for infants or people with compromised immune systems. The elderly could also be at serious risk for consuming Listeria monocytogenes contaminated food.
It is worth pointing out that no illnesses have been liked to consumption of the affected products. However, SunOpta is recalling them as part of its efforts to maintain high standards for food quality and safety. The company said in a statement that providing high quality products was its highest priority in the food business.
SunOpta, Inc. (USA) (NASDAQ: STKL) Cooperating with regulators
SunOpta said it was working with FDA and customers to ensure that no one was hurt by the affected products. Customers are advised to return the affected products to the stores for refund or they can dispose them.
It is not clear at this moment what amount of impact the recall would have on SunOpta, Inc. (USA) (NASDAQ: STKL)’s financial performance for the current quarter. However, the company posted a 28.6% YoY improvement in revenue in 1Q2016 to $352.3 million. It posted adjusted EPS of $0.03.