Flowers Foods (FLO) Q1 2025 Prepared Remarks earnings summary

Executive summary

• Net sales for Q1 2025 decreased 1.4% year-over-year to $1.554 billion, driven by volume and price/mix declines, partially offset by the Simple Mills acquisition, which contributed 1.6% to net sales.

• Net income dropped 27.4% to $53.0 million, mainly due to lower operating income, higher interest and SD&A expenses, and a higher tax rate.

• Adjusted EBITDA rose 1.6% to $162.0 million, with margin up 30 basis points to 10.4% of net sales.

• Leading brands gained or maintained unit and dollar share, with notable strength in organics, keto, gluten-free, and snacking segments, despite overall category declines.

• The Simple Mills acquisition expanded the portfolio in better-for-you snacking and was funded by new debt and credit facilities.

Financial highlights

• Net sales: $1.554 billion, down 1.4% year-over-year; price/mix -0.3%, volume -2.7%, acquisition +1.6%.

• Net income: $53.0 million, down 27.4% year-over-year; GAAP diluted EPS: $0.25, down $0.09; adjusted diluted EPS: $0.35, down $0.03.

• Adjusted EBITDA: $162.0 million, up 1.6% year-over-year; margin improved 30 basis points to 10.4%.

• Cash flow from operations increased $30 million to $136 million; capital expenditures decreased $8 million to $26 million.

• Dividends paid increased $1 million to $52 million in the quarter.

Outlook and guidance

• Fiscal 2025 net sales expected at $5.297–$5.395 billion; adjusted EBITDA: $534–$562 million; adjusted EPS: $1.05–$1.15, all lowered from prior guidance.

• Excluding Simple Mills: sales $5.079–$5.170 billion, adjusted EBITDA $504–$529 million, adjusted EPS $1.13–$1.22.

• Guidance reflects greater-than-expected category weakness, increased tariff headwinds, and higher net interest expense.

• 53rd week projected to add $70–80 million net sales, $5–7 million adjusted EBITDA, and ~$0.02 adjusted EPS.

• Capital expenditures forecasted at $140–$150 million; effective tax rate around 25%.