Flowers Foods Q1 Earnings & Revenues Miss Estimates, FY25 View Lowered

Core Insights - Flowers Foods, Inc. (FLO) reported first-quarter fiscal 2025 results with both net sales and earnings missing the Zacks Consensus Estimate, leading to a revised full-year outlook due to a challenging consumer environment and higher tariff costs [1][9]. Financial Performance - Adjusted earnings per share (EPS) were 35 cents, missing the Zacks Consensus Estimate of 38 cents, and decreased from 38 cents in the prior year [2]. - Net sales declined 1.4% year over year to $1,554 million, missing the Zacks Consensus Estimate of $1,603 million [2]. - Price/mix declined 0.3% due to increased promotional activity, while volumes dropped 2.7%, primarily from traditional loaf bread and cake [2]. - Branded retail sales decreased 0.4% to $1,011 million, with a 0.9% decline in price/mix and a 1.9% drop in sales volume [3]. - Other sales fell 3.3% to $543 million, influenced by inflationary pressures and non-retail margin optimization strategies [4]. Cost and Margin Analysis - Production costs contracted 50 basis points to 50.1% of sales, aided by moderating ingredient expenses, though offset by lower production volumes and higher workforce-related expenses [5]. - Selling, distribution, and administrative (SD&A) expenses rose to 40.8% of sales, up 110 basis points, driven by higher workforce-related expenses and acquisition costs [6]. - Adjusted EBITDA increased 1.6% to $162 million, with an adjusted EBITDA margin of 10.4%, expanding 30 basis points [7]. Financial Snapshot - At the end of the fiscal first quarter, cash and cash equivalents were nearly $7.3 million, with long-term debt at $1,790.4 million and stockholders' equity at $1,415.6 million [8]. - Cash flow from operating activities totaled $135.6 million, with capital expenditures of $25.6 million and dividends paid amounting to $52.3 million [8]. Outlook - For fiscal 2025, management revised net sales expectations to a range of $5.297-$5.395 billion, indicating a 3.8% to 5.7% increase year over year, down from previous guidance [9]. - Adjusted EBITDA is projected to be between $534-$562 million, compared to earlier estimates of $560-$591 million [9]. - Adjusted EPS is now expected in the range of $1.05-$1.15, revised from $1.11-$1.24 [10].