US baker Flowers Foods has changed its forecast for annual earnings, pointing to “heightened” competition and “challenging” trading conditions.
Flowers expects adjusted earnings per share to increase by 3.5% to 8% in 2012, including the contribution from its recent acquisition of regional rival of Lepage Bakeries.
The Lepage acquisition was sealed in July. In May, Flowers had given investors guidance its adjusted EPS would rise 3.5-8% but said the forecast did not include future acquisitions.
Without the impact of the Lepage deal, Flowers now expects EPS to be “flat to slightly up”.
Flowers said yesterday (14 August) its new forecast “takes into consideration the heightened marketplace competitiveness and overall challenging business environment”.
See Also:
Shares in Flowers closed down 4.26% at $19.99.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataThe changes to Flowers’ financial forecasts came as it reported its first-half and second-quarter results.
An increase in second-quarter profits failed to prevent Flowers reporting a drop in half-year earnings.
Flowers booked a slight increase in second-quarter net earnings, which edged up 0.6% to US$28.4m as pricing action and the benefit of acquisitions offset declining sales volumes.
However, the company’s first-half net income fell 4.4% to $66.3m as higher interest costs hit its bottom line.
Revenue for the three-months ended July 14 increased 6.1% to $681.6m, up from $642.6m last year. Pricing contributed 2.3% to gains while sales from the recently acquired Tasty Baking Co acquisition added 4.5%. However, these gains were offset by declining white bread, buns and rolls sales which resulted in a 0.7% drop in volumes.
Half-year net sales increased 9.3% to $1.58bn.