Flowers Foods income up 1% in quarter

by Staff
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THOMASVILLE, GA. — Higher prices and improved sales contributed to a 1% increase in income for Flowers Foods, Inc. during the second quarter.

For the quarter ended July 14, the company had income of $28,380,000, equal to 21c per share, which compared with an income of $28,210,000, or 21c per share, during the same quarter of the previous year. During the most recent quarter, the company had one-time acquisition costs of $1.4 million, but in the previous year’s quarter, the company had costs related to the Tasty acquisition of $3.2 million.

Sales increased 6% to $681,561,000, which compared with $642,596,000 during the same quarter of the previous year.

“We are pleased to deliver sales growth in the second quarter in the face of heightened promotional activity and a highly competitive marketplace,” said George E. Deese, chairman and chief executive officer. “Last year’s Tasty acquisition and the continued growth of our Nature’s Own and Tastykake brands drove our sales up 6.1% compared to last year. Even so, ongoing pressure on consumers has affected our industry much as it has other food categories, and softer volumes in the fresh breads, buns and rolls category is driving more competitive activity in the near term. Our team continues to work on improving efficiencies and cost controls in the face of high input cost inflation, and we achieved higher operating income in the quarter.

“The acquisition of Lepage Bakeries (completed July 21, 2012) brings us additional market presence in the Northeast, sales of about $170 million, and robust operating margins, which will strengthen our business. The opportunities presented by the Lepage acquisition, last year’s Tasty Baking acquisition and further industry consolidation strengthen my confidence in our team’s ability to achieve our long-term growth objectives for 5% to 10% annual sales growth, double-digit earnings growth and reaching 75% of the U.S. population with our direct-store-delivery segment by 2016.”

For the six months ended July 14, the company’s income declined 4% to $66,323,000, or 48c per share, which compared with $69,371,000, or 51c per share, during the same period of the previous year. Sales for the period were $1,579,767,000, up 9% from $1,444,421,000.

Looking ahead to the remainder of fiscal 2012, Flowers said it expects sales to increase 7% to 9% and earnings per share to increase 3.5% to 8%, excluding one-time costs, from 2011 adjusted earnings per share of 96c.

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