Flowers Foods (FLO) investor relations material

Executive summary

• Net sales rose 1.1% year-over-year to $1.572 billion, driven by the Simple Mills acquisition and favorable pricing/mix, offsetting volume declines.

• Net income fell 20.6% to $42.1 million, with adjusted net income down 17.4% to $60.9 million, reflecting higher costs, legal settlements, and a challenging consumer environment.

• Adjusted EBITDA decreased 1.8% to $159.0 million, representing 10.1% of net sales.

• Strategic review of brand portfolio, supply chain, and financial strategy is underway, with a sharpened focus on core brands and better-for-you segments.

• Relaunch of Nature's Own with a clean-label, non-GMO formula and national marketing campaign demonstrates investment in leading brands.

Financial highlights

• Net sales: $1.572 billion (+1.1% year-over-year); Branded Retail net sales up 3.4% to $1.045 billion, driven by pricing/mix and acquisition, despite a 4.2% volume decline.

• Net income: $42.1 million (-20.6% year-over-year); adjusted EBITDA: $159.0 million (10.1% margin); EPS: $0.20 (down $0.05); adjusted diluted EPS: $0.29 (down $0.06).

• Operating income: $79.8 million (-6.3% year-over-year); cash from operations: $107.9 million; capital expenditures: $20.6 million.

• Dividend reset to $0.50 per share annually to support deleveraging and balance sheet flexibility.

• Cash and cash equivalents at quarter end: $11.5 million; total available liquidity: $1.07 billion.

Outlook and guidance

• Fiscal 2026 net sales expected between $5.163 billion and $5.267 billion, a change of -1.8% to 0.2% year-over-year.

• Adjusted EBITDA guidance: $465 million to $495 million; adjusted diluted EPS: $0.80 to $0.90.

• Fully hedged on core commodities for 2026, with cost increases in packaging and oil derivatives factored into guidance.

• Capital expenditures expected at $115 million to $125 million, including $4 million–$8 million for ERP upgrade.

• Reaffirmed full-year outlook despite incremental cost headwinds and a more challenging top-line environment.