Flowers Foods, Inc. reported sales and earnings for its 12 and 28 weeks ended July 16, 2011. Taking into consideration the 3-for-2 stock split that was effective June 24, 2011, highlights of the quarter were:
- Completion of the acquisition of Tasty Baking Co., adding annualized sales of approximately $200 million.
- Earnings per share of $.21 compared to $.24, a decrease of 12.5 percent from the second quarter last year. Excluding one-time charges related to the Tasty acquisition, earnings per share were $.23, a decrease of 4.2 percent.
- Sales increased 5.7 percent compared to last year's second quarter, with price/mix contributing 4.5 percent and Tasty acquired sales contributing 3.3 percent, offset by a volume decline of 2.1 percent.
"In the second quarter, we delivered solid top line results and continued to focus on strategies to position Flowers Foods favorably over the long term," said George E. Deese, chairman of the board and chief executive officer in a prepared statement. "Sales growth was driven by a combination of good performance in our branded retail business and the contribution from the Tasty acquisition. From an earnings perspective, the DSD segment performed well, although cost increases and sales mix pressured gross margin. In the warehouse segment, margins were impacted as pricing lagged significantly higher ingredient costs and by an unforeseen shift of certain planned volume to later in the year," Deese said. "Both of these issues are being addressed and we expect improvement in the remaining quarters of 2011.
"A prolonged and slow economic recovery, compounded by higher costs, has continued to pressure consumer buying as well as business operations. While these macroeconomic factors can create short-term fluctuations in results, our team is managing through those issues by improving operations, reducing costs, and achieving the pricing necessary to keep our margins within our target range. Despite these pressures, we have confidence that our operating strategies are sound and our growth targets attainable over the long term."
"Our integration of Tasty Baking is well underway, and the plan to roll out Tastykakes in our direct-store-delivery markets has begun. In mid July, delivery of Tastykakes through the company's distribution system started in most of Florida, Georgia, Alabama, and South Carolina. Tasty Baking fits nicely into the five-year growth plan we shared at our analyst event in March, because it brings growth opportunities in new markets in the mid-Atlantic and Northeast for our Nature's Own brand as well as new markets for the Tastykake brand in the South and Southwest," Deese said. "We continue to believe market expansions, acquisitions, and further industry consolidation offer significant growth opportunities for Flowers Foods."
