Flowers Foods, Inc. Q1 Results

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Flowers Foods, Inc.
FLO
, the second-largest producer and marketer of fresh packaged bakery foods in the United States, released its earnings results for the fiscal quarter ending March 31, 2013 after the closing bell on Wednesday. In after-hours trading, the stock was up 2.29% to $34.42. The company reported an increase in its sales of 25.9%, which equated to net earnings of $1.13 billion or $0.46 earnings per share, compared to last year's corresponding quarter net earnings of $889.74 million or $0.28 earnings per share. The increase in sales increased earnings per share 64.285%, beating Wall Street estimates of $0.41 earnings per share. The company's adjusted net income increased from $37.9 million to $64.9 million compared to the prior year's fiscal quarter. The adjusted net income takes into account the company's bargain purchase accounting gain/acquisition-related costs for the quarter from the completed acquisition of the Sara Lee and Earthgrain brands for bread products in the state of California. Gross margin as a percentage of sales for the quarter were up 150 basis points compared to the corresponding financial quarter of last year, from 46.7% to 48.2%. Improvement can be attributed primarily due to higher sales volumes and a decrease in work-force related costs as a percentage of its sales. Flowers Foods Inc. also had several transactions during the quarter that could be significant moving forward. Announced on January 11, 2013, Flowers Foods Inc. reported that it had signed two asset purchase agreements for certain Hostess assets, an agreement that has been approved by bankruptcy court and is currently under regulatory review. Also of note, In keeping with the company's management succession plan, the board of directors elected Allen L. Shiver president and CEO, effective May 22, 2013. Shiver has worked with the company for 34 years, and is currently serving as president. After election, the current chairman of the board and CEO, George E. Deese, will transition to executive chairman of the board on the same date. As far as guidance goes, the company's executive vice president and CFO, R. Steve Kinsey, was quoted as saying, ““We continue to be very optimistic about the outlook for fiscal 2013 and, in the second quarter, we are continuing to see very good sales growth. Second quarter operating earnings also are expected to be strong, although we are experiencing start-up costs related to the integration of the Sara Lee business in California. Given that the Hostess transaction is currently under regulatory review, we are delaying full year 2013 guidance until the review is completed.” Flowers Foods, Inc. closed Wednesday at $34.42 and is currently trading down at 1.34%.
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