UPDATE: Flowers Foods Shares Drop On Downbeat Revenue, Lowered Forecast

Shares of Flowers Foods

dropped more than 2.5% in pre-market trading after the company reported weaker-than-expected third-quarter revenue and lowered its FY14 outlook. The Thomasville, Georgia-based company posted a quarterly adjusted net income of $44.4 million, or $0.21 per share, versus a year-ago profit of $38.4 million, or $0.18 per share. Its revenue fell 3.3% to $849.4 million in the period. However, analysts were projecting earnings of $0.20 per share on revenue of $881.61 million. Direct-Store-Delivery sales declined 1.6%, while sales through warehouse delivery slipped 11.8%. Gross margin, excluding depreciation and amortization, widened to 47.8% from 46.7%. Adjusted EBITDA rose to $98.9 million from $90.2 million. The company repurchased 550,000 shares of common stock during the quarter. Allen L. Shiver, president and chief executive officer, said, "We are pleased that sales from the acquired brands and new markets continue to grow sequentially, but overall the environment remains competitive as participants use price to gain volume. Even though we are not immune from the headwinds facing the food industry, we believe that our category is stable and our long-term growth prospects are encouraging.” For the full year, Flowers Foods now projects earnings of $0.86 to $0.90 per share, versus its earlier forecast of $0.92 to $0.98 per share. It now expects revenue of $3.75 billion to $3.77 billion, versus $3.88 billion to $3.94 billion. Flowers Foods shares fell 2.55% to $18.70 in pre-market trading.