US baker Flowers Foods has reduced its profit target for 2011 on the back of declining sales in the fourth quarter of 2010 and the year as a whole.
The baker, which manufactures the Nature’s Own, Whitewheat and Cobblestone Mill brands, reduced its forecast for diluted earnings per share in 2011 to growth of 5-10% – down from its original forecast of 8-13% growth.
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The company said its sales fell 1% in 2010 to US$573.1m. Fourth-quarter sales were down 0.6% to $2.57bn.
Flowers Foods chairman and CEO George Deese said: “Our sales volume was lower than expected in the fourth quarter as we initiated pricing action and reduced promotions in the face of commodity headwinds. The weak economy and high unemployment continue to pressure the market and impact consumer buying patterns.”
During the quarter, volumes were down 2.2%, which Flowers attributed to declines in the branded retail channel, particularly in the white brand, breakfast bread and cake categories, which were partially offset by increases in the sandwich round category.
Nevertheless, Flowers improved its bottom line in 2010. Its net income rose 5.2% to $137m. Fourth-quarter net income was up 2.6% to $31.4m.
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By GlobalDataClick here for Flowers Foods’ full earnings statement and click here for the company’s comments on commodity pressure and its M&A ambitions.
