FLOWERS FOODS, INC. REPORTS SECOND QUARTER 2025 RESULTS

Core Insights - Flowers Foods, Inc. reported a 1.5% increase in net sales to $1.243 billion for the second quarter ended July 12, 2025, driven by the acquisition of Simple Mills, despite declines in traditional loaf sales and a competitive environment [7][8][9] - The company is focusing on innovation and mergers and acquisitions to align its portfolio with consumer demand for healthier and value-oriented products [2][3] - Revised guidance for 2025 reflects lower-than-expected revenues, with net sales projected between $5.239 billion and $5.308 billion, indicating a growth of 2.7% to 4.0% compared to the previous year [9] Financial Performance - Net income decreased by 12.8% to $58.4 million, representing 4.7% of sales, primarily due to increased outside purchases and higher workforce-related costs [8][14] - Adjusted net income fell 16.0% to $63.4 million, with adjusted diluted EPS decreasing to $0.30 [8][33] - Adjusted EBITDA decreased by 4.0% to $137.7 million, representing 11.1% of net sales [8][32] Sales Breakdown - Branded Retail net sales increased by 5.0% to $826.7 million, aided by the Simple Mills acquisition, while other sales decreased by 4.9% to $416.1 million due to softer volumes [7][26] - The Simple Mills acquisition contributed $61.4 million in net sales but incurred a net loss of $2.1 million [8][14] Cost Structure - Materials, supplies, labor, and other production costs were 51.2% of net sales, a 110-basis point increase, primarily due to higher outside purchases and lower production volumes [14] - Selling, distribution, and administrative expenses were 38.1% of net sales, a decrease of 40 basis points, attributed to lower distributor fees [14] Future Outlook - The company expects adjusted diluted EPS for the full year to be in the range of $1.00 to $1.10, reflecting a downward revision from previous guidance [9][34] - The partial-year benefit of the Simple Mills acquisition is anticipated to contribute approximately $218 million to $225 million to net sales [9]