Flowers Foods, one of the largest bakery groups in the US, is to shut a site in the state of Georgia next month.
The Wonder bread maker said it is planning to close the Bailey Street Bakery on 16 April.
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The facility makes bread, buns and rolls for retail and foodservice customers, Flowers Foods said.
According to US media reports, the closure will affect 176 jobs. Flowers Foods did not confirm that number when approached by Just Food.
In the year to 28 December, the group generated net sales of $5.1bn, up 0.2% on 12 months earlier.
Net income more than doubled to $248.1m amid higher operating income. The company pointed to lower costs related to legal settlements, “moderating” ingredient costs, and benefits from “optimisation and cost savings initiatives”.
Adjusted net income increased 6% to $271.6m.
Speaking to analysts, Flowers Foods chairman and CEO Ryals McMullian said the company’s sales were “lower than expected”, citing “category weakness”.
He pointed to “significant weakness” in the sweet baked goods market, while, reflecting on the bread category, he outlined a series of possible factors affecting sales.
“The causes are difficult to isolate, but some attribute it to a variety of factors, including an economic slowdown, GLP-1s and healthier eating trends,” he said.
McMullian said Flowers Foods is aiming to become “a faster-growing, higher-margin business that will compound shareholder value over time” and added the group was making “significant progress” on margins.
He explained part of that those efforts will include M&A and pointed to the acquisition of US snacks business Simple Mills earlier this year for $795m.
However, McMullian added: “To further boost margins, we are focused on optimising our supply chain to provide the highest level of service to our customers in the most cost-efficient manner. Initiatives range from reducing production scrap, improving manufacturing efficiencies, optimising our transportation network, and rightsizing our transportation equipment base.”
