THOMASVILLE, GA. — Third-quarter sales exceeded expectations and rose to all-time highs at Flowers Foods, Inc. In the wake of the strong top-line performance, Flowers adjusted its full-year sales guidance to or slightly above the high side of its earlier projections.
Net income during the third quarter ended Oct. 5 was $43,358,000, equal to 20c per share on the common stock, up 9% from $39,630,000, or 19c per share, in the same period a year ago. Sales were $966,561,000, up 4.7% from $923,449,000.
Adjusted net income was down 1c from 21c. Restructuring and related impairment charges in the third quarter equaled $3,277,000, versus $497,000 in the third quarter last year. The previous year included $11,921,000 in legal settlement costs.
The strong quarterly sales were driven by branded business, which totaled $586.1 million, up 7% from the third quarter last year.
On a percentage basis, store brand sales grew even faster, up 9%, to $150.8 million in the quarter. By contrast, other sales, including food service and vending, were $229.6 million, down 2.4%. The company experienced growth in Dave’s Killer Bread, Wonder and the Nature’s Own Perfectly Crafted lines. Canyon Bakehouse gluten-free bread also contributed, as did the company’s Sun-Maid breakfast bread, introduced late in the third quarter of 2018.
The growth in store brand sales was attributed to strong sales of private label gluten-free bread made by Canyon.
During a conference call Nov. 7 open to investment analysts, A. Ryals McMullian, president and chief executive officer, described the acquisitions of Dave’s Killer Bread and Canyon Bakehouse as “resounding successes.”
Earnings guidance of 93c to 98c per share and adjusted e.p.s. of 94c to 99c were left unchanged.
Pressuring earnings during the quarter were higher materials, supplies, labor and other costs, equating to 42.7% of sales, up 10 basis points from last year.
Year-to-date net income was $163,319,000, or 77c per share, up 20% from $136,319,000, or 64c, in the first three quarters of 2018. Net sales were $3,206,215,000, up 4.4% from $3,071,185,000.