Rarely in the last 10 years has a high-volume bakery's white bread sales boosted a company's earnings. However, Flowers Foods' 12-week second quarter, which ended July 15, recorded a 10% sales increase, thanks in part to the company's traditional and white whole wheat products.

"Sales of Nature's Own Whitewheat breads increased by double digits, as did sales of core Nature's Own breads, contributing to good results reported for the Bakeries Group," said George Deese, Flowers Foods' chairman of the board, chief executive officer and president.

For the quarter, the company reported net sales of $446 million, a 10% increase compared to last year's $405 million. Net income for the quarter was $19.7 million, an increase of 11.3% compared to the $17.7 million reported for the second quarter of 2005.

The sales increase in the quarter resulted from favorable pricing of 6.4% and positive mix shift of 5%, offset slightly by a volume decline of 1.4% due to a decline in units. The company's Bakeries Group's sales increased 12% owing to a volume increase of 6.4%, favorable pricing of 4.9% and a 0.7% favorable product mix shift.

Flowers Specialty sales increased 2.3% driven by favorable pricing of 10.1% and a positive mix shift of 5.4%. These increases were negatively impacted by a 13.3% volume decline in the quarter due to the planned loss of contract production for certain customers. Gross margin declined to 49.7% of sales from 50% in the prior year's quarter, as a result of the startup costs for two new production lines at Flowers Bakeries and the effect of discontinued contract snack cake product at Flowers Specialty.

During the quarter, the company launched a bread line at its Villa Rica, Ga., plant and began production at its new plant in Newton, N.C. These lines alleviate the company's capacity issues, improve operations and allow the company to more aggressively go to market with new products.

"With new production capacity online, we are baking closer to our growth markets, which will save hauling costs and provide a much fresher product to consumers," Deese said.