Flowers Foods: Reaffirms 2016 Guidance, Revises Long-term Growth and Earnings Targets

Thomasville / GA. (ff) Flowers Foods Inc., one of the largest producer and marketer of fresh packaged bakery foods in the United States, hosted an investor briefing this week at the New York Stock Exchange during which it provided an update on the company’s operational and financial performance, its strategy for continued value creation, and its outlook for 2016 and beyond.

«We look forward to providing additional details on our strategy to drive profitable growth and deliver enhanced value for our shareholders at today’s meeting», commented Allen Shiver, Flowers Foods president and CEO. «Over the past ten years, our efforts to strengthen our brand portfolio and increase our geographic reach have led to an approximate 170 percent total return to shareholders – an annualized return of approximately 10.5 percent. We intend to continue delivering strong total shareholder returns by growing branded sales, executing on margin initiatives, expanding our brands and markets through prudent acquisitions, and returning capital to shareholders through dividends and opportunistic share repurchases».

Reaffirming 2016 Guidance

The company is reaffirming its sales and earnings guidance for fiscal year 2016, continuing to expect sales in the range of 3.986 billion USD to 4.080 billion USD, representing growth of approximately 5.5 percent to 8.0 percent over fiscal 2015. EPS guidance also remains unchanged from the previously provided range of 0.98 USD to 1.04 USD, excluding accretion related to the Accelerated Share Repurchase (ASR) announced in March, 2016, representing growth of approximately 6.5 percent to 13.0 percent over fiscal year 2015. On a full year basis, the company expects the ASR to be accretive to EPS by approximately 0.02 USD to 0.03 USD per share.

Revising Long-Term Outlook

As part of the company’s focus on its existing footprint and margin expansion, the company is revising its long-term goals for sales growth of 2 percent to 4 percent (beyond 2016 and excluding acquisitions), EBITDA margin of 12 percent to 14 percent, and earnings per common share of 8 percent to 10 percent. When combined with the continuation of the company’s strong dividend, Flowers believes these results will deliver total shareholder returns in excess of 10 percent.

«Going forward, we are focused on developing our existing geographic footprint, driving growth from our organic brands and other underdeveloped segments, and improving promotional and operational efficiencies», Shiver said. «While our revised long-term targets now exclude acquisitions, M+A will continue to be an important part of our growth strategy as we seek to identify opportunities that expand our margins and enhance our brand portfolio».

Nationwide Launch of Dave’s Killer Bread on April 25th

The company is launching the national rollout of organic, non-GMO Dave’s Killer Bread (DKB) on its direct-store-delivery network to allow approximately 85 percent of the U.S. population better access to fresh DKB products. The addition of approximately 9’000 new store locations for DKB products positions the brand for growth in the specialty premium bread segment.