We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Flowers Foods Q3 Earnings Miss on Weak Volumes, 2026 Outlook Cut
Read MoreHide Full Article
Key Takeaways
FLO's Q3 earnings fell 56.5% to 10 cents per share, while sales declined 4.7% on weak volumes.
Flowers Foods' adjusted EBITDA fell 33.2%, while margins shrank 280 basis points to 6.8%.
FLO cuts fiscal 2026 EPS guidance to 63-68 cents and sales outlook amid continued weak demand.
Flowers Foods, Inc. (FLO - Free Report) reported third-quarter fiscal 2026 results, wherein both top and bottom lines missed the Zacks Consensus Estimate. Net sales and adjusted earnings declined year over year, reflecting lower volumes, increased promotional activity and higher operating costs.
Adjusted earnings of 10 cents per share missed the Zacks Consensus Estimate of 15 cents and declined 56.5% from 23 cents in the year-ago quarter. Net sales decreased 4.7% year over year to $1,169.1 million, missing the consensus mark of $1,189 million. Volumes declined 7%, partially offset by a 2.3% increase in pricing/mix.
Flowers Foods, Inc. Price, Consensus and EPS Surprise
Flowers Foods faced continued pressure from constrained household budgets, shifting consumer preferences and heightened promotional activity. Traditional and premium loaf categories experienced significant weakness as consumers increasingly favored affordable products, smaller package sizes and differentiated offerings.
Management highlighted slower-than-anticipated improvement in Nature's Own following its relaunch with simpler ingredients. However, improving consumer awareness and narrowing year-over-year share losses in traditional loaf offered encouraging signs. The company is accelerating innovation in half-loaf and sourdough offerings to strengthen its portfolio.
Flowers Foods’ Sales Performance by Category
Branded retail sales decreased 5.1% year over year to $772.1 million, reflecting lower volumes, partially offset by favorable pricing/mix. Volumes declined 8.6%, while pricing/mix increased 3.5%.
Other net sales declined 4% to $397 million, primarily due to lower store-branded product sales, partly reflecting discontinued business. Growth in foodservice sales and improved non-retail volumes partially mitigated the decline. Pricing/mix increased 0.9%, while volumes fell 4.9%.
Within branded retail, Canyon Bakehouse gained both unit and dollar share in gluten-free bread. Wonder cake also delivered encouraging results, surpassing $100 million in revenues within two years of launch.
Simple Mills maintained growth momentum, with tracked-channel volumes increasing 13%. Cookie consumption increased 35%, while cracker consumption rose 8%, supported by distribution expansion, e-commerce performance and successful product innovation.
FLO’s Cost Structure and Margin Performance
Gross margin, excluding depreciation and amortization, contracted 120 basis points (bps) year over year to 46.7%. The decline primarily reflected reduced operating leverage from lower production volumes and greater outside product purchases, partially offset by lower ingredient costs.
Adjusted selling, distribution and administrative expenses decreased to $466.7 million from $469.7 million in the prior-year period. However, adjusted SD&A expenses increased 160 bps as a percentage of sales to 39.9%, reflecting higher marketing investments, fuel and logistics costs. Increased marketing spending was largely associated with the Nature’s Own relaunch.
Adjusted EBITDA decreased 33.2% year over year to $78.9 million. Adjusted EBITDA margin contracted 280 bps to 6.8%, reflecting lower sales and continued cost pressures.
Flowers Foods’ Financial Snapshot
FLO ended the third quarter with cash and cash equivalents of $72.2 million and long-term debt of $1,675.2 million. Stockholders’ equity totaled $1,314.2 million.
During the first 40 weeks of fiscal 2026, cash flow from operating activities totaled $319.9 million compared with $320.8 million in the year-ago period. Capital expenditures decreased to $64.5 million from $80.3 million.
Dividends paid totaled $107.6 million compared with $157 million a year earlier. Management emphasized debt reduction and financial flexibility as key priorities, highlighting an $80-million reduction in debt year to date.
FLO Revises Fiscal 2026 Outlook Downward
Flowers Foods lowered its fiscal 2026 guidance, reflecting weaker third-quarter performance and continued challenges in consumer demand and competitive conditions.
Management now expects net sales between $5,016 million and $5,063 million, implying a year-over-year decline of 3.7-4.6%. The previous projection was $5,070-$5,142 million.
Adjusted EBITDA is anticipated between $415 million and $430 million, down from the earlier projection of $453-$481 million. Adjusted earnings per share are expected in the range of 63-68 cents compared with the previous guidance of 75-85 cents.
Capital expenditures are projected at $115-$125 million. Management expects depreciation and amortization of $165-$170 million and net interest expense of $60-$65 million.
Flowers Foods' Strategic Priorities and Initiatives
FLO is prioritizing product innovation, improved promotional effectiveness and stronger customer execution to stabilize volumes and market share. Management is focusing on expanding distribution, strengthening merchandising and accelerating the introduction of products aligned with evolving consumer preferences.
Management expects challenging operating conditions to persist into 2027, including a more difficult input-cost environment. The company is pursuing productivity improvements, organizational simplification and bakery and distribution network optimization. These initiatives are aimed at improving operational efficiency, maintaining financial flexibility and supporting profitability over time.
The Zacks Rank #3 (Hold) stock has tumbled 47.2% over the past year compared with the industry’s decline of 11.7%.
The Zacks Consensus Estimate for Lamb Weston’s current fiscal-year EPS implies growth of 7.6% from the year-ago figure. LW delivered a trailing four-quarter earnings surprise of 22.1%, on average.
The J.M. Smucker Company (SJM - Free Report) , a leading manufacturer and marketer of branded food, beverage, pet food and pet snack products, currently carries a Zacks Rank #2 (Buy). SJM delivered a trailing four-quarter earnings surprise of 13.8%, on average.
The Zacks Consensus Estimate for The J.M. Smucker’s current fiscal-year EPS implies growth of 17.1% from the year-ago figure.
Altria Group, Inc. (MO - Free Report) , a leading U.S. tobacco and nicotine company, currently carries a Zacks Rank of 2. MO delivered a trailing four-quarter earnings surprise of 1.3%, on average.
The Zacks Consensus Estimate for Altria Group’s current fiscal-year sales and EPS indicates an increase of 3% and 5.2%, respectively, from the year-ago period.
View the Zacks #1 Rank List
Image: Bigstock
Flowers Foods Q3 Earnings Miss on Weak Volumes, 2026 Outlook Cut
Key Takeaways
Flowers Foods, Inc. (FLO - Free Report) reported third-quarter fiscal 2026 results, wherein both top and bottom lines missed the Zacks Consensus Estimate. Net sales and adjusted earnings declined year over year, reflecting lower volumes, increased promotional activity and higher operating costs.
Adjusted earnings of 10 cents per share missed the Zacks Consensus Estimate of 15 cents and declined 56.5% from 23 cents in the year-ago quarter. Net sales decreased 4.7% year over year to $1,169.1 million, missing the consensus mark of $1,189 million. Volumes declined 7%, partially offset by a 2.3% increase in pricing/mix.
Flowers Foods, Inc. Price, Consensus and EPS Surprise
Flowers Foods, Inc. price-consensus-eps-surprise-chart | Flowers Foods, Inc. Quote
FLO's Quarterly Performance: Key Insights
Flowers Foods faced continued pressure from constrained household budgets, shifting consumer preferences and heightened promotional activity. Traditional and premium loaf categories experienced significant weakness as consumers increasingly favored affordable products, smaller package sizes and differentiated offerings.
Management highlighted slower-than-anticipated improvement in Nature's Own following its relaunch with simpler ingredients. However, improving consumer awareness and narrowing year-over-year share losses in traditional loaf offered encouraging signs. The company is accelerating innovation in half-loaf and sourdough offerings to strengthen its portfolio.
Flowers Foods’ Sales Performance by Category
Branded retail sales decreased 5.1% year over year to $772.1 million, reflecting lower volumes, partially offset by favorable pricing/mix. Volumes declined 8.6%, while pricing/mix increased 3.5%.
Other net sales declined 4% to $397 million, primarily due to lower store-branded product sales, partly reflecting discontinued business. Growth in foodservice sales and improved non-retail volumes partially mitigated the decline. Pricing/mix increased 0.9%, while volumes fell 4.9%.
Within branded retail, Canyon Bakehouse gained both unit and dollar share in gluten-free bread. Wonder cake also delivered encouraging results, surpassing $100 million in revenues within two years of launch.
Simple Mills maintained growth momentum, with tracked-channel volumes increasing 13%. Cookie consumption increased 35%, while cracker consumption rose 8%, supported by distribution expansion, e-commerce performance and successful product innovation.
FLO’s Cost Structure and Margin Performance
Gross margin, excluding depreciation and amortization, contracted 120 basis points (bps) year over year to 46.7%. The decline primarily reflected reduced operating leverage from lower production volumes and greater outside product purchases, partially offset by lower ingredient costs.
Adjusted selling, distribution and administrative expenses decreased to $466.7 million from $469.7 million in the prior-year period. However, adjusted SD&A expenses increased 160 bps as a percentage of sales to 39.9%, reflecting higher marketing investments, fuel and logistics costs. Increased marketing spending was largely associated with the Nature’s Own relaunch.
Adjusted EBITDA decreased 33.2% year over year to $78.9 million. Adjusted EBITDA margin contracted 280 bps to 6.8%, reflecting lower sales and continued cost pressures.
Flowers Foods’ Financial Snapshot
FLO ended the third quarter with cash and cash equivalents of $72.2 million and long-term debt of $1,675.2 million. Stockholders’ equity totaled $1,314.2 million.
During the first 40 weeks of fiscal 2026, cash flow from operating activities totaled $319.9 million compared with $320.8 million in the year-ago period. Capital expenditures decreased to $64.5 million from $80.3 million.
Dividends paid totaled $107.6 million compared with $157 million a year earlier. Management emphasized debt reduction and financial flexibility as key priorities, highlighting an $80-million reduction in debt year to date.
FLO Revises Fiscal 2026 Outlook Downward
Flowers Foods lowered its fiscal 2026 guidance, reflecting weaker third-quarter performance and continued challenges in consumer demand and competitive conditions.
Management now expects net sales between $5,016 million and $5,063 million, implying a year-over-year decline of 3.7-4.6%. The previous projection was $5,070-$5,142 million.
Adjusted EBITDA is anticipated between $415 million and $430 million, down from the earlier projection of $453-$481 million. Adjusted earnings per share are expected in the range of 63-68 cents compared with the previous guidance of 75-85 cents.
Capital expenditures are projected at $115-$125 million. Management expects depreciation and amortization of $165-$170 million and net interest expense of $60-$65 million.
Flowers Foods' Strategic Priorities and Initiatives
FLO is prioritizing product innovation, improved promotional effectiveness and stronger customer execution to stabilize volumes and market share. Management is focusing on expanding distribution, strengthening merchandising and accelerating the introduction of products aligned with evolving consumer preferences.
Management expects challenging operating conditions to persist into 2027, including a more difficult input-cost environment. The company is pursuing productivity improvements, organizational simplification and bakery and distribution network optimization. These initiatives are aimed at improving operational efficiency, maintaining financial flexibility and supporting profitability over time.
The Zacks Rank #3 (Hold) stock has tumbled 47.2% over the past year compared with the industry’s decline of 11.7%.
Stocks to Consider
Lamb Weston Holdings, Inc. (LW - Free Report) , a leading global manufacturer, marketer and distributor of value-added frozen potato products, currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Lamb Weston’s current fiscal-year EPS implies growth of 7.6% from the year-ago figure. LW delivered a trailing four-quarter earnings surprise of 22.1%, on average.
The J.M. Smucker Company (SJM - Free Report) , a leading manufacturer and marketer of branded food, beverage, pet food and pet snack products, currently carries a Zacks Rank #2 (Buy). SJM delivered a trailing four-quarter earnings surprise of 13.8%, on average.
The Zacks Consensus Estimate for The J.M. Smucker’s current fiscal-year EPS implies growth of 17.1% from the year-ago figure.
Altria Group, Inc. (MO - Free Report) , a leading U.S. tobacco and nicotine company, currently carries a Zacks Rank of 2. MO delivered a trailing four-quarter earnings surprise of 1.3%, on average.
The Zacks Consensus Estimate for Altria Group’s current fiscal-year sales and EPS indicates an increase of 3% and 5.2%, respectively, from the year-ago period.