US: Promotions weigh on Flowers Foods profits
By: just-food.com | 4 February 2010
US baker Flowers Foods today (4 February) posted flat quarterly profits as sales were dented by high promotional activity among US retailers.
Shares in Flowers fell 1.8% to US$24.73 in early trading on the New York stock exchange after the company said fourth-quarter net income reached $30.6m, down 4.5% on the year.
Earnings per diluted share stood at $0.34 - against $0.33 a year ago.
Flowers' numbers in the fourth quarter of 2008 included an extra week and the company said that, when the quarter was compared on a 12-week basis, earnings per share were up "slightly".
Fourth-quarter sales were down 7.2% at $576.8m - and flat when the extra week was removed from the numbers.
During the quarter, Flowers sales were affected by "heavy promotional activity" aming retailers, while gross margins also dipped.
Nevertheless, chairman and CEO George Deese was upbeat about Flowers' position.
"We exited 2009 better positioned than we entered it - our bakeries are more efficient, our brands and product mix stronger, and our geographic reach broader," he said.
Over the full year, sales increased 7.7% to $2.6bn over the 53 weeks of fiscal 2008. On a 52-week comparison, 2009 sales increased 9.7%.
Net income was $130.3m, or $1.41 per diluted share, up 9.3% on last year. On a 52-week comparison, 2009 earnings per share increased 11.9%.
Deese added: "Our pricing strategy and strong brands helped Flowers Foods achieve a record year despite continued competitive challenges in our markets."
For the complete Flowers Foods 2009 earnings release, click here. Check back later for further insight on the company's numbers.
Companies: Flowers Foods
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