Shares in Flowers Foods tumbled today (12 August) after the US bakery group cuts its forecasts for annual sales and earnings.

The company pointed to competition in the sector and cost of investing in its geographic presence and production.

Flowers said it now sees adjusted earnings per share in the range of US$0.92 to US$0.98, excluding an asset impairment charge. In May, Flowers predicted earnings per share of US$0.98-1.05.

The revised forecast still equals a 1.1-7.7% increase in adjusted EPS, Flowers noted.

It now estimates sales will hit US$3.88-3.94bn, up 3.5-5% on 2013, but lower than the US$3.98-4.13bn it forecast in May.

President and CEO Allen Shiver said: “Our revised guidance takes into account the expected impact of current competitive dynamics as well as the effect of costs we have incurred to expand our geographic footprint, add production capacity to serve expansion markets, and enhance the strength of our brands. For the remainder of 2014, our team will focus on improving sales and earnings in our existing bakeries and in the markets we have entered.”

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He added: “We are firm in our belief that over time Flowers Foods’ team and our proven strategies will deliver growth in line with our long-term objectives.”

Flowers’ first-half net income was down 34.9% at US$103.1m, it reported today. EBIT slid 27.2% to US$163.6m. The company’s profits were affected by the absence of a US$50.1m gain in last year’s half-year numbers, although higher SG&A costs also weighed on the numbers. Sales inched up 0.4% to US$2.04bn.

Shares in Flowers were down 4.27% at US$19.16 at 12:50 EDT.