• Lowers FY EPS forecast
  • Capex to increase
  • Q1 profits down, sales up 
Flowers Foods revised guidance contained an increase in capital expenditure

Flowers Food's revised guidance contained an increase in capital expenditure

US baker Flowers Foods has cut its forecast for full-year earnings after a bond issue pushed up the company's interest charges.

The company said yesterday (24 May) it expects its adjusted earnings per share in 2012 to increase by 3.5% to 8% on last year's $0.96. In February, Flowers set a forecast for growth of 7% to 12%. However, Flowers said the new forecast did not include any "future acquisitions".

Last month, the company issued $400m of notes to pay long-term debt and set aside funds for future deals.

Flowers' revised guidance also contained an increase in capital expenditure. It now expects to spend $75-85m, including the recently-announced expansion of a bakery in Pennsylvania. Its previous forecast was $65-75m.

The group, which manufactures brands including Tastykake and Nature's Own, also reported a drop in first-quarter profits. Input costs, including ingredients and packaging, offset a rise in sales.

Net income fell 8% to $37.9m. EBIT decreased 3.7% to $59.2m. However, sales were up 12% at $898.2m thanks to last year's acquisition of Tasty Baking Co. Nevertheless, Flowers managed to increase volumes by 1.7%.

"While input costs presented headwinds in the first quarter, we were relatively pleased with our results," chairman and CEO George Deese said.

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