Flowers Foods (FLO) Q4 2025 Prepared Remarks earnings summary

Executive summary

• Achieved results at the high end of 2025 guidance, driven by efficiency initiatives, portfolio transformation, and strong brand performance, despite a challenging consumer environment and volume declines in traditional loaf bread.

• Maintained or grew unit share in fresh packaged bread, with standout growth from Dave's Killer Bread and strong performances from Nature's Own, Canyon Bakehouse, and Wonder.

• Proactively reviewed operations and brand portfolio to reignite top-line growth and expand margins, with a focus on supply chain and financial strategy optimization.

• 2026 is expected to be an investment and transition year, with increased marketing and innovation spend to unlock long-term potential, despite near-term margin pressure.

Financial highlights

• Q4 2025 net sales increased 11.0% year-over-year to $1.233B, with price/mix up 70 bps and volume down 2.2%; Simple Mills acquisition and an extra week contributed 4.7% and 7.8% to sales growth, respectively.

• GAAP diluted EPS was a loss of $0.32, down $0.52 from prior year, due to a $136M non-cash impairment and other one-time items; adjusted diluted EPS was $0.22, flat year-over-year.

• Adjusted EBITDA for Q4 2025 was $117.4M, up 14.7% year-over-year, with a 9.5% margin.

• Cash flow from operations was $446M for 2025, up $34M; capex was $127M, dividends paid $209M.

• Simple Mills contributed $213.9M in net sales and a net loss of $14.4M for the year.

Outlook and guidance

• Fiscal 2026 net sales expected between $5.163B and $5.267B; adjusted EBITDA $465M–$495M; adjusted diluted EPS $0.80–$0.90.

• Guidance reflects one fewer week (1.5% headwind), ongoing inflation, and category headwinds of ~4%.

• Continued investment in brands, innovation, and marketing expected to drive share gains but pressure margins in the near term.

• Full-year tax rate expected at 26%, with Q1 at 30% due to discrete compensation-related items.

• Assumptions include depreciation/amortization of $165–$170M and net interest expense of $65–$70M.