THOMASVILLE, Ga. (AP) — Baked goods company Flowers Foods' net income edged up in the second quarter as increased prices and better sales of Nature's Own breads and Tastykake products pushed revenue higher.
The Thomasville, Ga., company reported on Tuesday that it earned $28.4 million, or 21 cents per share, compared with $28.2 million, or 21 cents per share, in the prior-year period.
Stripping out acquisition-related costs, earnings were 22 cents per share.
This matched the expectations of analysts surveyed by FactSet.
Revenue for the period ended July 14 increased 6 percent to $681.6 million from $642.6 million, but fell short of Wall Street's $701.5 million.
Direct store delivery sales, which make up 83 percent of revenue, climbed 7.6 percent. Warehouse sales, comprising 17 percent of revenue, dipped 0.7 percent.
Softer volumes in fresh breads, buns and rolls are creating more near-term competition in those categories, Chairman and CEO George Deese said in a statement.
Gross margin slipped 50 basis points to 46.3 percent during the quarter mostly because of rising ingredient and packaging costs.
Escalating costs for ingredients, production and packaging has hurt many food companies, which has led many businesses to boost their prices to help offset some of the pressure.
Going forward, Flowers Foods Inc. still anticipates fiscal 2012 adjusted earnings climbing 3.5 percent to 8 percent from last year's 96 cents per share. This implies about 99 cents to $1.04 per share. Revenue is expected to increase 7 percent to 9 percent from 2011's $2.77 billion, implying approximately $2.96 billion to $3.02 billion.
Analysts predict earnings of $1.03 per share on revenue of $3.06 billion, on average.