Packaged bakery products maker Flowers Foods Inc. (FLO) reported Thursday a profit for the first quarter that increased from last year, reflecting acquisition related gain, improved margins and strong double-digit sales growth amid dollar sales and volume increases across all channels. Both adjusted earnings per share and quarterly revenues topped analysts' expectations.
Looking ahead, the company said it is delaying the guidance for the full-year 2013 until the regulatory review of the Hostess transaction is completed.
As part of its management succession plan, the company named current President Allen Shiver to take over as the new CEO and current Chairman and CEO George Deese to take over as executive chairman, both effective May 22 at the 2013 annual shareholders meeting. Shiver is a company veteran with 34 years of service.
"We believe the results we reported today reflect the best performance in the company's history. We achieved substantial sales increases in both segments, across all channels, and in our primary product categories. We also delivered outstanding earnings," Deese said in a statement.
The company added that it was able to take advantage of the departure of the Hostess brands from the market last fall.
The Thomasville, Georgia-based second-largest producer and marketer of fresh packaged bakery foods in the U.S. reported net income of $113.28 million or $0.81 per share for the first quarter, sharply higher than $37.94 million or $0.28 per share in the prior-year quarter.
The results for the latest quarter primarily include a benefit of $0.37 per share reflecting a bargain purchase accounting gain related to the Sara Lee/California acquisition, which was completed in February.
Excluding items, adjusted net income for the quarter was $64.90 million or $0.46 per share, compared to $37.94 million or $0.28 per share in the year-ago quarter.
On average, nine analysts polled by Thomson Reuters expected the company to report earnings of $0.42 per share for the quarter. Analysts' estimates typically exclude one-time items.
Sales for the quarter grew 25.9 percent to $1.13 billion from $898.21 million in the same quarter last year, and topped eight Wall Street analysts' consensus estimate of $1.09 billion.
The sales growth was attributable to increased volumes of 19.3 percent and contributions from the Lepage Bakeries and Sara Lee/California acquisitions of 7.7 percent, partially offset by unfavorable net price/mix of 1.1 percent.
Direct-store-delivery sales grew 25.1 percent to $922.40 million, and warehouse delivery sales increased 29.5 percent to $208.41 million from the year-ago quarter.
Gross margin improved 150 basis points to 48.2 percent from last year, due primarily to higher sales volumes and decreased workforce-related costs as a percent of sales.
The company stated that the board of directors will consider the dividend at its next regularly scheduled meeting.
"We continue to be very optimistic about the outlook for fiscal 2013 and, in the second quarter, we are continuing to see very good sales growth. Second quarter operating earnings also are expected to be strong, although we are experiencing start-up costs related to the integration of the Sara Lee business in California," CFO Steve Kinsey stated.
In Thursday's regular session, FLO is currently trading at $34.47, up $0.05 or 0.15% on a volume of 0.14 million shares.
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