The bakery industry is extremely fragmented, but Flowers Foods (NYSE:FLO) has been working hard to boost consolidation across the industry and take advantage of favorable trends. In particular, Flowers has emphasized acquisitions that follow the same trend toward healthy eating that grocers like Kroger (NYSE:KR) have pursued, and coming into Wednesday's third-quarter financial report, Flowers Foods investors wanted evidence that the bread maker could still post reasonable growth. The company largely delivered on that front, and although some investors were disappointed with its guidance, Flowers sees a brighter future ahead. Let's take a closer look at Flowers Foods and what its latest results mean for the company going forward.
What Flowers Foods served up in its latest report
Flowers' third-quarter results largely met or exceeded what investors had expected to see from the company. Revenue rose 4.8% to $885 million, which was almost double the growth rate that those following the stock were looking to see. Adjusted net income rose more than 8% to $48 million, and that produced adjusted earnings of $0.23 per share, matching the consensus forecast among investors.
Unlike what we've seen in recent quarters, the two main business divisions at Flowers Foods had fairly similar top-line performance. Sales for the company's direct store delivery segment rose 4.5%, with name-brand retail sales leading the way higher and offsetting tepid growth in store-brand sales. The warehouse business saw even faster sales growth of 6.1%, with foodservice, vending, and contract manufacturing sales jumping almost 9% and leading the way higher. In terms of adjusted operating income, though, the warehouse segment underperformed, with a 2.4% drop compared to a rise of more than 8% for direct store delivery.
To read the rest of the story, please go to: The Motley Fool