Flowers Foods, the US baker, downgraded its sales and earnings forecasts for the full year as declining volumes weighed on the top line.

Delivering its third-quarter update today (12 November), the company said it now expects full-year sales to total US$3.75-3.77bn, compared to previous guidance of $3.88-3.94bn. Flowers also lowered its EPS forecast range to $0.86-0.90, down from $0.92-0.98.

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During the third quarter, Flowers saw revenue decline 3.3% to $849.4m. The drop was due to a 4.4% decrease in sales volumes, which was partially offset by pricing.

Efficiency initiatives and a stringent cost focus enabled Flowers to book higher earnings in the period. The company revealed EBIT increased to $69.4m, or 8.2% of sales, compared to $60.3m, or 6.9% of sales, in the comparable period of last year. Net income increased to $44.4m, up 15.6%.

President and CEO Allen Shiver said: “Manufacturing efficiencies improved both sequentially and year-over-year. We are seeing improvement at our Lepage operations and I am confident in the team’s ability to further enhance profitability there.”

On the group’s lowered guidance, Shiver added: “We are working to right-size the business to better align with the near-term market realities, without sacrificing our longer-term prospects for growth, and our revised guidance incorporates the effects of the market issues we have discussed. Our team is focused on making sure our cost-structure is aligned with our sales volumes as they stand today. We believe our strategy is sound and we remain committed to those factors that will ultimately determine our long-term success – growing our market share by better serving our core and expanding our geographic reach.”

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Flowers shares were down 2% at 09:43 ET, dropping to $18.87.