Continuing to make its lasting imprint on the baking industry, Flowers Foods, Inc. has released its 2016 Q2. The company saw several increases across the board, most notably to its overall sales which increased by 5.2% in comparison to last year.
"Benefiting from strong consumer demand for organic breads, our two recent acquisitions, DKB [Dave’s Killer Bread] and Alpine [Alpine Valley Bread], along with expansion markets, drove sales growth in the second quarter, offsetting sales declines in our core markets due to competitive pressures," said Allen Shiver, Flowers Foods President and CEO.
Other notable highlights to the company’s Q2 were as followed, when compared to second quarter results from 2015:
Teaming up with Accenture, the company also launched a new comprehensive review of its operations during the quarter, called Project Centennial. The project was cultivated to spearhead greater revenue growth, improve margins, and strategically strengthen its position in the challenging market.
"Over the past five years, we have built a strong competitive position in the marketplace, as we made strategic acquisitions to extend our geographic reach and enhance our portfolio of brands. I am confident that with Project Centennial, an in-depth review of our operations, we can enhance shareholder value by identifying new avenues for growth, as well as focusing on ways to become a more efficient and profitable organization better able to deliver long-term value for shareholders," continued Shiver.
Flowers Foods stated in a press release that due to increased competitive activity and weak category volumes, the company lowered its fiscal outlook for 2016 sales, diluted EPS, and adjusted diluted EPS; the specific adjustments can be accessed here.
"Our revised guidance takes into consideration soft consumer demand in the bakery category, as well as heightened promotional activity in our industry,” continued Shiver. “The Flowers team has significant experience successfully navigating periods of heightened promotional activity like we are currently seeing, and we have already taken steps to address underperforming markets and improve profitability. Those markets have begun steady improvement, and as sales grow, the company expects to leverage costs and realize efficiencies.”
In this vein of growth, the company reported that during the quarter, its cash flow was $73.2 million, capital expenditures were $17.8 million, and dividends paid were $33.4 million.
"As always, we continue to manage Flowers for the long-term," Shiver continued, "and so far this year, we've made good strides building share in growing market segments, extending our geographic reach, and investing in bakeries to support our growth. Even though these activities required time and investment, we are confident they are the right things to do in order to build sustainable value."
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