Flowers income, sales rise in fiscal '09
February 4, 2010
by Eric Schroeder
THOMASVILLE, GA. — Net income of Flowers Foods Inc. in the fiscal year ended Jan. 2 was $130,297,000, equal to $1.41 per share on the common stock, up 9% from $119,233,000, or $1.28, in fiscal 2008. Net sales were $2,600,849,000, up 7.7% from $2,414,892,000.
”In light of the myriad challenges we faced in 2009, we are very pleased to report sales and earnings growth in line with our previously provided guidance,” said George E. Deese, chairman, chief executive officer and president. “Our pricing strategy and strong brands helped Flowers Foods achieve a record year despite continued competitive challenges in our markets. We exited 2009 better positioned than we entered it — our bakeries are more efficient, our brands and product mix stronger, and our geographic reach broader.
“Our team is focused on opportunities to continue growing through new product innovation, expansion markets, and further penetration of our core territories to deliver earnings growth for our shareholders over the long term.”
Acquisitions were the largest contributor to the 7.7% sales growth, accounting for 7.3 percentage points with pricing/mix reflecting another 2.6 points partly offset by a negative 0.2 point from volume decline and 2 points from the lack of the additional week compared with fiscal 2008.
“Sales were affected by volume declines in the non-retail channel, specifically in the vending, institutional, and contract manufacturing categories and by heavy promotional activity in all categories, particularly within the branded white bread category of the retail channel,” the company said. “This was somewhat offset by increased volumes in the multi-pack cake, breakfast bread, and soft variety bread categories within the branded retail channel.”
Excluding the 53rd week sales in fiscal 2008, D.S.D. sales during 2009 rose 8.8%, while warehouse delivery sales rose 12.1%.
Gross margin as a percentage of sales was 46.5% versus 47.7% in fiscal 2008. Flowers said the decrease in margin reflected increased promotions as well as higher ingredient costs as a percentage of sales, which were offset partially by lower packaging and labor costs as a percentage of sales, and improved manufacturing efficiencies.
For 2010, Flowers confirmed its projected sales growth of 2.5% to 4.5%, excluding future acquisitions, and earnings-per-share growth of 10% to 15%.
Flowers projected capital expenditures in fiscal 2010 of $85 million to $95 million, in line with its estimate given when third-quarter results were announced in late 2009.
For the fourth quarter ended Jan. 2, net income totaled $30,649,000, or 33c per share, down 4% from $32,086,000, or 34c per share, in the same period a year ago. Sales in the quarter were $576,824,000, down 7.2% from $621,592,000 in the same period a year ago. The most recent quarterly results reflected a 12-week quarter, which compared with a 13-week quarter during the same period of fiscal 2008.