Dive Brief:
- Flowers Foods reported a sales increase of 3.9% to $3.927 billion for fiscal 2016, according to the company’s earnings report. Overall for the year, its net income decreased 13.4% to $163.8 million.
- For the company’s fourth quarter, sales increased 1.2% to $868.7 million. Quarterly net income declined 59.6% to $13 million, while diluted EPS decreased 60% to $0.06.
- In fiscal 2017, Flowers Foods expects sales in the range of $3.927 billion to $4.006 billion, representing growth of approximately 0.0% to 2.0%.
Dive Insight:
Flowers Foods had a strong fourth quarter, capping an even stronger fiscal 2016. The year was boosted by solid performances of new acquisition Dave’s Killer Bread, Nature’s Own and the Wonder brand.
CEO Allen Shiver said the company had lower-than-expected input costs that helped offset higher workforce-related and consulting costs. The company is continuing its comprehensive business and operational review to grow sales and improve profits called "Project Centennial."
“With Project Centennial, we are taking decisive action to pivot towards the consumer and remove complexity and costs from our business,” Shriver said in the earnings report. “In fiscal 2017, we are moving forward with urgency to reinvigorate our core business, reduce costs, and build capabilities to efficiently grow our brands.”
The company is hoping to attain that through simplifying and streamlining its brand assortment. It plans more efficiency through providing more to distributors, reducing costs of goods and services, and being more efficient. Whether that streamlining will come easily, especially with so many acquisitions, remains to be seen.
Direct store delivery saw sales increase 2.2%, with higher volume contributing the most toward the growth. But the warehouse segment saw a decrease of 3.6% year to year.