Investing.com -- Lifted by its acquisition of a wide variety of bread brands under the Hostess umbrella, Georgia-based Flower Foods narrowly beat revenue and earnings forecasts for the last three months, the company said in a quarterly report on Wednesday.
During its second quarter, which ended in mid-July, Flower Foods saw its revenues increase 1.8% to $888.8 million, slightly above analyst expectations of $888 million for the period. The revenue gains outpaced moderate increases in unallocated corporate expenses, as the company posted net earnings of $51.8 million or 0.24 per share for the quarter. It represents a significant increase from profits last year during the same quarter when Flower Foods reported earnings of $42.1 million or 0.20 per share. Analysts also expected the company to finish with earnings of 0.22 for the 13-week period.
In addition, Flower Foods reported a 16% spike in EBITDA to $111 million and a 13% increase in adjusted EBITDA to $113 million. Flower Foods set second quarter records for EBITDA and earnings per share.
"Our team delivered an outstanding second quarter, with both of our operating segments posting top- and bottom-line growth. In our core markets, new products combined with our enhanced brand strategy brought consumers to our brands and improved margins," Flower Foods CEO Allen Shiver said in a statement. "In our expansion markets, we continue to gain share with Wonder, Nature's Own, and our other proven brands. Retail sales of our two largest cake brands, Tastykake and Mrs. Freshley's, both posted growth, driven by the appeal of new products and expanded distribution."
"During the quarter, we also saw the benefit of our operational initiatives. Across a majority of our bakeries we realized improved manufacturing efficiencies, which, when combined with reduced input prices, drove margin expansion this quarter," Shiver said. "This quarter, profitability at Lepage returned to more normalized levels, which also contributed to the strong margins in our DSD segment."
Flower Foods left its forward guidance for the remainder of the year unchanged. The company anticipates sales of $3.786 billion to $3.861 billion for the year as a whole and adjusted diluted earnings per share of $0.96 to $1.01.
"The record results we report today are the result of hard work from the entire Flowers team to deliver value to shareholders," Shiver added. "Looking ahead, we have significant momentum as we continue to execute our strategy. To grow sales and attract consumers, we intend to innovate our product portfolio and leverage our strong brands. To increase margins, we will improve efficiencies and reduce our costs. And finally, we continue to seek out strategic acquisition opportunities in order to expand our brand portfolio and geographic footprint."