Flowers Foods 2Q net income rises as costs fall

THOMASVILLE, Ga.

Bakery goods company Flowers Foods Inc. said Thursday its net income rose 11 percent in the second quarter, as lower expenses helped counteract a decline in sales.

Flowers said it earned $33.8 million, or 37 cents per share, in the three months ended July 17. That's up from $30.3 million, or 33 cents per share, one year ago. Revenue fell 1 percent, to $607.7 million from $614.4 million.

Analysts expected profit of 35 cents per share and $622.6 million in revenue, according to Thomson Reuters.

The company said its direct store delivery revenue decreased 3 percent to $489.9 million and warehouse delivery sales grew 10 percent to $117.8 million.

Flowers reported improved sales of Nature's Own soft breads and sandwich rounds and said cake sales grew. It said revenue from sales of white and specialty breads and food service declined.

The company spent less money on material, supplies, labor and other production costs. It said that spending fell by 4, or almost $15 million, to $318.6 million.

Last year's results also included a $3 million gain on an acquisition.

Flowers said it still expects profit per share to grow 10 percent to 15 percent this year, which suggests a total of $1.55 to $1.62 per share. But it cut its sales forecast and now believes revenue will rise 1 to 2 percent rather than 2.5 percent to 4 percent. That implies a total of $2.63 billion to $2.65 billion. Previously, it had forecast revenue of $2.67 billion to $2.7 billion.

Analysts expect a profit of $1.55 per share and revenue of $2.64 billion on average.

Shares of Flowers Foods slid 1 cent to $24.95 in midday trading.