Flowers Foods, Inc. (NYSE:FLO) Q3 2019 Earnings Conference Call Transcript

Nov 07, 2019 • 08:30 am ET

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Flowers Foods, Inc. (NYSE:FLO) Q3 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Welcome to the Flowers Foods, Third Quarter 2019 Results Conference Call, and Webcast. My name is Paulette, and I will be your operator for today's call. [Operator Instructions].

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

Executive
J.T. Rieck

Thank you, Paulette, and good morning everyone. Our third quarter results were released yesterday evening. The earnings release and our quarterly slide presentation is posted in the Investors section of the Flowers Foods website. Our 10-Q was filed with the SEC yesterday evening as well. Before we begin please be aware that our discussion 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 will 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 Ryals McMullian, Flowers Foods' President and Chief Executive Officer; and Steve Kinsey, our Vice -- our Executive Vice President and Chief Financial Officer.

Ryals, I'll turn the call over to you.

Executive
A. Ryals McMullian

Thanks, J.T. Good morning and welcome to our third quarter call. We are very happy today to report record sales ahead of our forecast and reiterate our outlook for fiscal 2019 adjusted EPS. Regarding our four strategic pillars: focusing on our brands prioritizing margin pursuing smart M&A and developing our team we are pleased to see good momentum in several of them. We continue to make nice progress growing our portfolio of top brands. The DKB and Canyon acquisitions have been resounding successes. And although it's harder to see from a quantitative standpoint we are doing some great things for the development of our team. But as we said in yesterday's release we are still facing some margin headwinds.

After five months as CEO, I've had the opportunity to assess where we are and what we need to do to improve our profitability while maintaining the great top line momentum we have enjoyed this year. And I'm looking forward to sharing that with you on the call today. However, before I do that like we did last quarter I want to call on Steve Kinsey first to review the financial results and give our outlook for the remainder of the year to set the context for what we will talk about in a few minutes. Then, of course, we will take your questions.

Steve?

Executive
R. Steve Kinsey

Thank you, Ryals, and good morning everyone. In the third quarter, we continued to experience solid performance on the top line driven primarily by sales in the retail channel. Consolidated sales increased $43.1 million or 4.7% year-over-year. Canyon Bakehouse acquired in late 2018 contributed 2.2%. In the base business improved price mix drove 2.1% of the sales increase while higher volumes benefited the top line by 40 basis points. Price realization has improved across most