FLO - Flower Foods rallies after higher pricing leads to earning topper

2023-08-10 16:25:24 ET

Flower Foods ( NYSE: FLO ) reported sales rose 8.8% to $1.23B in Q2 . Pricing was up 13.3% during the quarter to offset a 6.1% decline in volume. The Papa Pita acquisition added 1.6% of growth to the quarterly sales tally.

Branded retail sales increased 7.1% to $787.8M due to higher prices intended to offset inflationary pressures, an improved mix from greater branded organic product sales, and the acquisition contribution, partially offset by volume declines. Other sales increased 11.9% to $440.3M due to substantial price increases implemented prior to Q2 intended to offset inflationary pressures, and the acquisition contribution, partially offset by volume declines.

Adjusted EBITDA increased 10.9% during the quarter to $133.1M to represent 10.8% of sales in comparison to 10.6% a year ago. Net income increased 18.8% to $63.8M.

CEO update: "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. To reflect this strong second quarter performance, we are adjusting our fiscal 2023 guidance... Consumers continue to seek value, though we are seeing some early indications that they may be acclimating to higher prices and reverting toward prior purchasing behavior. To capitalize on this environment and spur future growth, we remain focused on bringing new and innovative products to market and implementing initiatives to increase productivity and efficiencies."

Looking ahead, Flower Foods ( FLO ) sees full-year revenue of $5.10B to $5.14B vs. $5.11B consensus and EPS of $1.18 to $1.25 vs. a prior range of $1.15 to $1.25 and the consensus estimate of $1.20. The company also guided for full-year capex spending of $145M to $155M, which was a boost from the prior forecast for $140M to $150M.

Shares of Flower Foods ( FLO ) rose 3.57% in postmarket to $25.65 after shedding 0.30% during the regular session.

More on Flower Foods:

• Dividend grades on Flower Foods
• Growth metrics on Flower Foods
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• Seeking Alpha's Quant Rating for Flower Foods

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