Flowers Foods Financial Results Affected by Inflation and Commodities Prices

Flowers Foods recorded a net income decreased from USD57.7m to USD20.8m for the fourth quarter of 2018, despite the sales increased for the same period.

Compared to the prior year, the sales increased in the fourth quarter by 0.8% to USD880.7m. However, the results presented by the company for 2018 were positive.

Compared to the prior year, the figures showed sales increased by 0.8% to USD3.952bn and net income increased by 4.7% to USD157.2m.

Dave’s Killer Bread, Nature’s Own, and Wonder brands drove the financial growth for Flower Foods in 2018.

Allen Shiver, Flowers Foods president and CEO, commented: “We finished 2018 with solid top-line momentum. Our brand portfolio once again achieved record market share in the fourth quarter, driven by growth from Dave’s Killer Bread, Nature’s Own, and Wonder. Despite taking pricing actions and realizing cost savings under Project Centennial, we were not immune to the inflationary pressures from commodities, transportation and other sector headwinds, which negatively impacted our results for the quarter.”

On the other hand, in 2019, Shiver expects Dave’s Killer Bread, Nature’s Own, and Wonder to drive sales growth, along with the rollout of Canyon Bakehouse across their distribution network. “We are continuing to urgently address inflationary pressures through revenue management and productivity initiatives. We also are accelerating key supply chain optimization initiatives intended to drive productivity and reduce fixed costs,” he said.

For the 52-week fiscal 2019, the company expects sales in the range of approximately USD4.030bn to USD4.109bn, representing growth of approximately 2.0% to 4.0%.