Vending

Flowers Foods reports record Q3 2023 sales, suffers loss on legal costs

Logo: Flowers Foods Inc.

November 22, 2023

Flowers Food Inc., which owns the Mrs. Freshley's, Tastykake, Nature's Own and other consumer brands, reported record Q3 2023 sales of $1.2 billion but suffered an earnings loss due to legal settlement costs, according to an earnings report.

Highlights include:

• Sales increased 3.5% from $1.158 billion in Q3 2022 to a third-quarter record, $1.2 billion, for the quarter ending Oct. 7, 2023.
• Net income decreased $87.3 million from $40.53 million to a net loss of $46.7 million in the comparative quarters, primarily due to increased legal settlement expense.
• Adjusted net income decreased 4.5% to $61.7 million.
• Diluted EPS decreased from 19 cents to a loss of 22 cents.
• Adjusted diluted EPS decreased by one cent to 29 cents.
• Branded retail sales increased 3% from $748.5 million to $771.2 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. The company acquired Papa Pita Bakery in February.
• Other sales increased 4.5% from $409.7 million to $428.1 million due to price increases intended to offset inflationary pressures and the acquisition contribution, partially offset by volume declines.

Shares traded at $21.21 today against a 52-week range of $19.64 to $30.16.

The company declared a 23 cents per share quarterly dividend payable Dec. 15 for shareholders of record on Dec. 1.

The $1.2 billion in quarterly revenue missed analyst expectations by $10 million while the non-GAAP EPS of 29 cents beat expectations by 1 cent, according to Seeking Alpha.

"We are pleased to have delivered another quarter with record sales, where we maintained unit share in a challenging environment," Ryals McMullian, chairman and CEO, said in the press release. "Our pricing strategy proved effective, helping to mitigate inflation and drive top line results. Volume trends improved sequentially, reflecting strong branded retail performance and the diminished impact of business rationalizations. We continued to invest in areas that we expect to drive future growth, including our team, bakeries, brand marketing and digital initiatives."