Flowers Foods, Inc. (NYSE:FLO) Q4 2018 Earnings Conference Call Transcript

Feb 07, 2019 • 08:30 am ET


Flowers Foods, Inc. (NYSE:FLO) Q4 2018 Earnings Conference Call Transcript


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Welcome to the Flowers Foods Fourth Quarter and Full Year 2018 Results Earnings Conference Call and Webcast. My name is Elin, and I will be your operator for today's call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session. (Operator Instructions) Please note that this conference is being recorded.

I will now turn the call over to J.T. Rieck, Vice President, Investor Relations and Treasurer. You may begin. Mr. Rieck you may begin.

J.T. Rieck

Thank you and and good morning, everyone, Our fourth quarter results were released yesterday evening. The earnings release and our updated investor presentation is posted in the Investors section of the Flowers Foods website.

Before we begin please be aware that our presentation today may include forward-looking statements about our company's performance. Although, we believe those statements to be reasonable they are subject to risks and uncertainties that could cause actual results to differ materially. In addition to matters we'll discuss during the call important factors relating to Flowers Foods' business are fully detailed in our SEC filings.

With that, I'll make some introductions. Participating on the call today we have Allen Shiver, Flowers Foods' Chief Executive Officer; and Steve Kinsey Flowers' Chief Financial Officer. Allen, I'll turn the call over to you.

Allen L. Shiver

Thank you J.T. and good morning. Before we begin our review this past quarter and year I want to take a moment to commend our Flowers' team for their hard work. 2018 was year two in our 5-year journey to reposition Flowers Foods as a national consumer-focused food company.

Substantial progress was made against our strategic priorities, even as the team navigated unexpected disruptions. I am confident Flowers is well positioned to drive shareholder value. We have leading brands and a national footprint in a large and stable category. Our scale and relevancy with our retail partners enables us to leverage our distribution platform to strategically add differentiated products to our portfolio and drive profitable growth.

Now turning to the quarter. Overall our fourth quarter performance was consistent with our expectations. Our brand portfolio is performing well. Once again, we achieved record market share for the quarter. We gained market share in both the loaf and breakfast segments. In each of our top three bread brands Nature's Own, Dave's Killer Bread and Wonder increased their share of the category.

I want to point out that we accomplished these share gains with less promotional activity this quarter compared with the year ago. I'm pleased with the top line. However, earnings growth remains a major focus for our team. Commodity and transportation costs have been stiff headwinds to margin over the past two years. We have been able to partially mitigate these headwinds through our savings initiatives, which have offset more than $80 million of these costs since 2016.

In addition to attacking our cost, we've taken pricing where appropriate. We continue to redo pricing market-by-market and we'll adjust when necessary. We made progress on our strategic goals last