US bakery Flowers Foods has trimmed its full-year guidance on the back of a drop in third-quarter sales and profits.
For the 12 weeks ended 9 October, the firm earned US$31.2m, down slightly from the $31.9m earned in the comparable period last year.
Sales slid 0.8% to $597.9m, which Flowers Foods attributed to a negative pricing/mix of 2.4% due to “continued pricing pressures and substantial promotional activity”.
EBIT dropped to $46.7m from $51.1m in the prior-year period.
Flowers chairman and CEO George Deese said: “This quarter proved to be another challenging one. As the economy continued under pressure from high unemployment, consumers shopped in different patterns and promotional levels for fresh bread products increased. These marketplace dynamics, coupled with higher-than-anticipated costs for starting up new manufacturing lines and introducing new products, resulted in flat sales and earnings compared to last year’s third quarter.”
However, Deese added: “The overall sales trend has improved quarter to quarter since the beginning of the year. I am pleased to report that four weeks into the fourth quarter, we have seen sales improve compared to last year’s quarter due to the pricing actions we have taken.”
Nevertheless, for the full year, Flowers said it now expects sales to be “flat to slightly up”, compared to previous guidance of 1-2%, while EPS is expected to now be around 10-12% from the firm’s previous estimate of 10-15%.
In the year-to-date period, net income rose 6% to reach $105.6m, while EBIT edged up to $160m from $159.2m.
Sales for the 40-week period, however, dropped 1.2% to $2bn.