Vending

Flowers Foods reports record Q2 2023 results

August 11, 2023

Flowers Foods Inc., which owns the Mrs. Freshley's, Tastykake, Nature's Own and other consumer brands, reported record Q2 sales for 2023 against the prior period, according to an earnings release. The company also lifted its earnings and surpassed analyst expectations. Highlights include:

• Sales increased 8.8% from $1.13 billion in Q2 2022 to $1.23 billion in the quarter ending July 15, 2023, a second quarter record. Pricing/mix increased 13.3%, volume declined 6.1% and the Papa Pita acquisition added 1.6%.
• Branded retail sales increased 7.1% to $787.8 million due to higher prices intended to offset inflationary pressures, improved mix from greater branded organic product sales and the acquisition contribution, partially offset by volume declines.
• "Other" sales increased 11.9% to $440.3 million due to substantial price increases implemented prior to the second quarter of fiscal 2023 intended to offset inflationary pressures and the acquisition contribution, partially offset by volume declines.
• Net income increased 18.8% from $53.6 million to $63.8 million in the comparative quarters.
• Net income per diluted share rose from 25 cents to 30 cents.
• Adjusted diluted EPS rose from 31 cents to 33 cents.

Shares traded today at $25.71 against a 52-week range of $23.87 to $30.16.

The quarterly revenue of $1.23 billion beat analyst expectations by $30 million and the non-GAAP EPS of 33 cents beat expectations by 5 cents, according to Seeking Alpha.

"Our branded retail business performed well in a competitive environment, characterized by continued, but moderating, consumer trade down to private label products," Ryals McMullian, chairman, CEO and president, said in the press release. "We're also pleased to have grown sales and profitability in our 'other' category, as price increases to mitigate inflationary pressure more than offset business rationalizations and cost increases."

The company adjusted its full year guidance for sales in the range of approximately $5.095 billion to $5.141 billion, representing an annual increase of approximately 6% to 7%. Prior guidance called for sales of approximately $5.086 billion to $5.141 billion.

It also revised its adjusted diluted EPS to approximately $1.18 to $1.25, compared to prior guidance of $1.15 to $1.25.