Flowers Foods Q3 Earnings Meet Estimates, Revenues Increase 3% Y/Y

Core Insights - Flowers Foods, Inc. (FLO) reported third-quarter fiscal 2025 results with modest sales growth but missed the Zacks Consensus Estimate for revenue, while adjusted earnings per share (EPS) declined year over year but met consensus expectations [1][3][11]. Financial Performance - Sales reached $1,226.6 million, a 3% increase year over year, but fell short of the Zacks Consensus Estimate of $1,233 million [4][11]. - Adjusted EPS was 23 cents, reflecting a 30.3% decline year over year [3]. - The Simple Mills acquisition contributed 5.9% to sales, helping to offset declines in price/mix and volume [4][11]. Sales Breakdown - Branded retail sales increased by 6.9% to $812.8 million, driven by the Simple Mills acquisition, despite unfavorable price/mix and lower volumes [5]. - Other sales decreased by 3.8% to $413.8 million, impacted by unfavorable price/mix, although volume for non-retail items increased [6]. Cost and Margin Analysis - Production costs increased to 52.1% of net sales, up 190 basis points, due to higher outside product purchases and lower production volumes [7]. - Selling, distribution, and administrative (SD&A) expenses were 38.8% of sales, reflecting a slight increase due to higher workforce-related costs [8]. - Adjusted EBITDA decreased by 11.4% to $118.1 million, with an adjusted EBITDA margin of 9.6%, down 160 basis points [9]. Cash Flow and Financial Position - Cash flow from operating activities totaled $54.3 million, with capital expenditures of $23.9 million and dividends paid amounting to $52.3 million [12]. - At the end of the fiscal third quarter, cash and cash equivalents were nearly $16.7 million, with long-term debt at $1,779.6 million and stockholders' equity at $1,420.5 million [10]. Fiscal 2025 Outlook - Management revised the fiscal 2025 net sales outlook to a range of $5.254-$5.306 billion, indicating a year-over-year increase of 2.9% to 4% [13]. - Adjusted EBITDA is projected to be between $515-$532 million, while adjusted EPS is expected in the range of $1.02-$1.08 [14].