How Was Flowers Foods’ 4Q17 Sales Performance?
Dave’s Killer Bread demand was robust
Driven by strong demand for Dave’s Killer Bread, Flowers Foods (FLO) reported 4Q17 sales of $873.6, which easily beat the analysts’ estimate of $861 million.
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On a YoY (year-over-year) basis, sales increased 0.6%. Sales benefited 110 basis points from favorable product and price mixes but were negatively impacted by 50 basis points due to divestiture. For fiscal 2018, sales are expected to be up in the range of about $3.92 billion to $3.98 billion, which reflects growth of 0.0% to 1.6% on a YoY basis.
The company remains focused on innovations as well as strategic acquisitions to boost sales. The company is also investing in brand marketing to gain market share. However, a tough marketplace for traditional bakery products and stiff competition remain headwinds.
Flowers Foods’ DSD segment reported a 1.1% increase in sales to $738.6 million in fiscal 4Q17. The segment sales benefitted 340 basis points due to a favorable product mix. However, lower volumes negatively impacted sales by 230 basis points.
On the other hand, the Warehouse segment reported a 2.3% decline in sales to $135.1 million. Unfavorable price and product mix impacted sales by 560 basis points, and another 320-basis-point impact came from the divestiture. Both these factors offset a positive impact of 650 basis points from higher volumes.
For Conagra (CAG), sales are expected to be up 1% to $2 billion in fiscal 3Q18. The company’s sales are expected to benefit from acquisitions and improving foreign exchange rates.
On the other hand, analysts expect Campbell Soup (CPB) sales to be down 0.7% to $2.2 billion in fiscal 2Q18. The company operates in a challenging market and weakness in the US Soup business continues to be a headwind.