THOMASVILLE, GA. — Buoyed by strong branded retail sales, particularly in its Canyon Bakehouse, Dave’s Killer Bread and Nature’s Own Perfectly Crafted brands, Flowers Foods, Inc. delivered strong earnings and sales in fiscal 2019.
Net income in the year ended Dec. 28, 2019, was $164,538,000, equal to 78c per share on the common stock, up 4.6% from $157,160,000, or 74c per share, in 2018. Sales were $4,123,974,000, up 4.3% from $3,951,852,000.
Results in both years included large special items. In the most recent year, these included restructuring charges of $23,524,000 and a gain attributed to inferior ingredients of $37,000.
Net income in the fourth quarter was $2,219,000, or 1c per share, down 89% from $20,841,000, or 10c per share, in the same period a year ago. Sales were $917,759,000, up 4.2% from $880,667,000.
In the fourth quarter, sales of branded products rose 5.5%, to $551.7 million, and private label sales rose 7.5%, to $140.3 million. Non-retail sales fell 0.8%, to $225.8 million.
“In the fourth quarter, our top-line momentum continued as consumers shifted to differentiated on-trend brands like Dave’s Killer Bread, Canyon Bakehouse and Nature’s Own Perfectly Crafted,” A. Ryals McMullian, president and chief executive officer, said during a Feb. 6 conference call with analysts. “According to (Information Resources, Inc.), these three brands together experienced strong double-digit growth in the fourth quarter compared to the fresh packaged bread category, which was only up 30 basis points.
“The integration of Canyon Bakehouse has gone exceedingly well. Not only did Canyon grow from the No. 3 gluten-free bread brand in the country all the way to No. 1, we also exceeded both our sales targets and earnings contribution goals for the year. …
“D.K.B. just continues to be a truly remarkable growth story. We acquired D.K.B. just over four years ago. And since then, it’s grown to become our second largest brand, with retail sales of approximately $581 million. So just think about that for a second. That’s more than half of Nature’s Own at retail, and Nature’s Own was introduced over 40 years ago. And it’s almost as much as all of our white bread brands combined. And the best news is, we still have plenty of room to grow in certain underdeveloped geographies and with additional customers who either don’t carry D.K.B. today or who are not currently within our current D.S.D. footprint.”
Offering guidance for 2020, Flowers projected sales of $4,206 million to $4,289 million, up 2% to 4% from 2019. Adjusted earnings per share of $1 to $1.08 would compare with adjusted earnings per share of 96c in 2019 (78c reported). As part of the guidance, Flowers said it expects capital expenditures of $105 million to $115 million, which compared with $103.7 million in 2019, $99.4 million in 2018 and $75.2 million in 2017.