Bakery goods maker Flowers Foods Q2 sales rises on Simple Mills acquisition

Overview

• Flowers Foods Q2 net sales rise 1.5% to $1.243 bln, slightly missing estimates, per LSEG data

• Adjusted EPS meets expectations at $0.30, adjusted net income beats estimates

• Adjusted EBITDA falls 4% to $137.7 mln, missing analyst expectations

Outlook

• Flowers Foods expects 2025 net sales to $5.239 bln-$5.308 bln

• Company expects 2025 adjusted EBITDA of $512 mln-$538 mln

• Adjusted diluted EPS for 2025 projected at $1.00-$1.10

• Simple Mills acquisition to add $218 mln-$225 mln to 2025 sales

Result Drivers

• SIMPLE MILLS ACQUISITION - Acquisition contributed $61.4 mln to net sales, offsetting pricing/mix and volume declines

• COST PRESSURES - Net income decreased due to higher outside purchases, workforce-related costs, and interest expenses

• BREAD CATEGORY CHALLENGES - Macroeconomic uncertainty and shifting consumer demand pressured traditional loaf sales

Key Details

Analyst Coverage

• The current average analyst rating on the shares is "hold" and the breakdown of recommendations is 1 "strong buy" or "buy", 6 "hold" and 1 "sell" or "strong sell"

• The average consensus recommendation for the food processing peer group is "buy."

• Wall Street's median 12-month price target for Flowers Foods Inc is $18.50, about 10.4% above its August 14 closing price of $16.58

• The stock recently traded at 15 times the next 12-month earnings vs. a P/E of 15 three months ago

Press Release: ID:nPnc2D5P7a