Flowers Foods, Inc. Reports First Quarter 2025 Results: A Mixed Bag

Flowers Foods, Inc. (NYSE: FLO) has released its financial results for the first quarter of 2025, presenting a complex picture of performance amidst economic challenges and strategic shifts. The company’s acquisition of Simple Mills played a significant role in shaping the quarter’s outcomes.

Flower Foods, Inc. Reports 1.4% Decrease in Q1 Net Sales

In the first quarter of 2025, Flowers Foods, Inc. reported a 1.4% decrease in net sales to $1.554 billion, primarily due to a decline in pricing and volume, despite the contribution from the Simple Mills acquisition.

The acquisition added $24.3 million in net sales but was not enough to offset the overall decline. Net income dropped significantly by 27.4% to $53 million, which is 3.4% of sales, reflecting a decrease of 120 basis points. This decline was attributed to reduced sales, increased selling, distribution, and administrative expenses, and higher interest expenses, although these were partly offset by lower ingredient costs.

The company’s diluted earnings per share (EPS) fell by $0.09 to $0.25, which is below the market expectation of $0.38. Adjusted diluted EPS also decreased by $0.03 to $0.35.

Despite these declines, adjusted EBITDA saw a modest increase of 1.6% to $162 million, representing 10.4% of net sales, a 30-basis point improvement. This increase in adjusted EBITDA indicates some operational efficiencies, even as net income and EPS fell short of expectations.

Chairman and CEO Ryals McMullian emphasized the strength of Flowers Foods’ leading brands, which maintained or gained market share despite broader category declines. The company is actively investing in innovation and targeting growth opportunities in emerging categories to counteract the challenges faced in the quarter.

The expansion into the snacking category with Dave’s Killer Bread and the acquisition of Simple Mills are part of these strategic initiatives aimed at aligning with consumer demand for healthier, differentiated products.

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Flowers Foods, Inc. Adjusts Full Year Outlook

Looking ahead, Flowers Foods has adjusted its financial guidance for the 53-week fiscal year 2025 to reflect the first-quarter performance and the challenging consumer environment. The company now expects net sales to range between $5.297 billion to $5.395 billion, representing a growth of 3.8% to 5.7% compared to the previous year.

This is a revision from the prior guidance of $5.403 billion to $5.487 billion. Excluding the Simple Mills acquisition, expected net sales are projected to be between $5.079 billion to $5.170 billion, indicating a growth of -0.5% to 1.3% compared to the prior year.

Adjusted EBITDA for the fiscal year is anticipated to be between $534 million to $562 million, down from the previous guidance of $560 million to $591 million. Excluding the Simple Mills acquisition, adjusted EBITDA is expected to be between $504 million to $529 million.

The acquisition is projected to contribute $30 million to $33 million to adjusted EBITDA, slightly lower than the prior estimate. The additional 53rd week in the fiscal year is expected to add $5 million to $7 million to adjusted EBITDA.

Flowers Foods has also revised its adjusted diluted EPS guidance to a range of $1.05 to $1.15, compared to the earlier guidance of $1.11 to $1.24. Excluding the impact of the Simple Mills acquisition, adjusted diluted EPS is projected to be between $1.13 to $1.22.

The acquisition is expected to have a slight negative effect on EPS, contributing between ($0.08) to ($0.07), while the 53rd week is anticipated to add approximately $0.02 to adjusted diluted EPS. These adjustments reflect the company’s strategic focus on navigating current challenges while positioning itself for future growth.

Disclaimer: The author does not hold or have a position in any securities discussed in the article. All stock prices were quoted at the time of writing.