Baked food producer Flowers Foods, Inc. (FLO), Thursday, reported a decline in fourth-quarter profit, that also came below estimates, hurt by one lesser week than the year-ago quarter as well as increased promotional activity. Going forward, the Thomasville, Georgia-based company expects earnings and revenue growth in fiscal 2010.
For the quarter, net income attributable to company dropped 4.5% to $30.65 million or $0.33 per share from $32.09 million or $0.34 per share last year. On average, nine analysts polled by Thomson Reuters expected the company to report earnings of $0.34 per share. Analysts' estimates typically exclude special items.
Sales for the quarter declined 7.2% to $576.82 million from $621.59 million last year, affected by volume declines in the non-retail channel, specifically in the foodservice, vending, and institutional categories and by heavy promotional activity in all categories, somewhat offset by increased volumes in the branded retail channel. Seven analysts were looking for a revenue of $586.63 million.
This year's fourth quarter was a 12-week quarter compared to a 13-week quarter last year. On a 12-week comparison basis with the fourth quarter of fiscal 2008, sales for the 2009 fourth quarter were relatively flat and earnings were up slightly, the company said.
Segment-wise, Direct-Store-Delivery sales declined 10.1% to $471.03 million from $523.83 million last year, affected by heavy promotional activity in the retail channel as well as reduced volumes and negative price-mix.
Warehouse Delivery sales improved 8.2% to $105.79 million from $97.77 million last year, reflecting volume increase impact of 3.9% and positive price-mix impact of 2.9% and acquisition impact of 10.9%.
Gross margin was 47.1% compared to 48.3% last year, mainly due to increased promotions as well as higher ingredient and labor costs, partially offset by decreases in packaging and utility costs and improved manufacturing efficiencies.
For the full year, net income attributable to the company grew 9.3% to $130.30 million or $1.41 per share from $119.23 million or $1.28 per share last year. Sales grew 7.7% reaching $2.60 billion from $2.41 billion last year. Analysts expected the company to report earnings of $1.40 per share on revenues of $2.61 billion.
Looking ahead, for fiscal 2010, the company expects a sales growth of 2.5% to 4.5% and earnings growth of 10% to 15% per share. Capital expenditures are expected to be $85 million to $95 million. Currently, analysts expect fiscal 2010 earnings of $1.55 per share and revenue of $2.68 billion for the company.
FLO shares closed Wednesday's regular trading session at $25.18 on the NYSE.
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