Commodity costs hit Flowers Foods’ bottom-line28 May 2012
Baker Flowers Foods Inc. has reported a fall in fiscal first-quarter profit despite registering higher-than-expected sales growth.
Flowers Foods netted $37.9 million in the sixteen weeks that ended 21 April, 7.9% down from $41.2 million during the same period last year.
The Thomasville, Georgia-based manufacturer of Nature’s Own bread and Tastykakes attributed the fall to rising flour, oil and sugar prices and higher operational costs. Flowers Foods said it was facing double-digit increases in the price of flour.
Revenue was up 12% to $898.2 million from $801.8 million after the firm was boosted by its Tastykake acquisition. The growth exceeded the expectations of analysts.
“As our earnings and margins experienced pressure in the quarter, we tightened administrative and operational expenses and continued to improve productivity levels. We expect to maintain these improved productivity levels and cost structure as the year unfolds,” said George E Deese, Flowers Foods' chairman and chief executive.
"Looking ahead, our growth strategies continue to serve us well. We are achieving increases in our core business and our expansion markets. We also expect to take advantage of opportunities as the baking industry further consolidates. We are positioned to add new bakeries as needed, enter new geographic territories, and make acquisitions as we work to build shareholder value over the long term."
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