Flowers Foods Q1 Earnings & Revenues Miss Estimates, FY25 View Lowered

Flowers Foods, Inc. FLO reported first-quarter fiscal 2025 results, wherein both top and bottom lines missed the Zacks Consensus Estimate. Both net sales and earnings experienced year-over-year declines. Management revised its full-year 2025 outlook, citing first-quarter performance, a challenging consumer environment and the anticipated impact of higher tariff costs.Flowers Foods’ Quarterly Performance: Key InsightsAdjusted earnings per share (EPS) of 35 cents missed the Zacks Consensus Estimate of 38 cents. The bottom line also decreased from 38 cents reported in the year-ago quarter. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)Flowers Foods, Inc. Price, Consensus and EPS Surprise Flowers Foods, Inc. price-consensus-eps-surprise-chart | Flowers Foods, Inc. QuoteSales declined 1.4% year over year to $1,554 million. The top line missed the Zacks Consensus Estimate of $1,603 million. Price/mix declined 0.3%, impacted by increased promotional activity in branded retail. Volumes dropped 2.7%, mainly due to decreases in traditional loaf bread and cake. The Simple Mills acquisition added 1.6%. We estimated the price/mix to be up 1.4% and volumes to decline 1.1% in the first quarter.Branded retail sales inched down 0.4% to $1,011 million, due to lower volumes and an unfavorable price/mix due to heightened promotional activity. These headwinds were partially offset by contributions from the Simple Mills acquisition. The pricing/mix inched down 0.9%, sales volume decreased 1.9% and the Simple Mills acquisition contributed 2.4%. We anticipated the price/mix and volumes to be down 1.1% each in the fiscal first quarter.Other sales decrease 3.3% to $543 million, impacted by inflationary pressure on consumer spending and the execution of non-retail margin optimization strategies. While pricing/mix improved 0.4% and volume declined 3.7%. We estimated the price/mix to be up 6% and volumes to decline 1% in the fiscal first quarter.Decoding FLO’s Costs & Margins PerformanceMaterials, supplies, labor and other production costs (exclusive of depreciation and amortization) contracted 50 basis points (bps) to 50.1% of sales on moderating ingredient expenses. This improvement was partially offset by lower production volumes, higher workforce-related expenses and increased outside product purchases.Selling, distribution and administrative (SD&A) expenses were 40.8% of sales, up 110 bps. The increase in SD&A costs as a percentage of net sales was driven by higher workforce-related expenses, acquisition-related costs and vehicle rental fees. These were partially offset by lower distributor distribution fees, savings from cost-reduction initiatives implemented after the fiscal first quarter of the prior year and reduced incentive compensation. Adjusted SD&A expenses were 39.5% of sales, up 20 bps from the year-ago quarter. Adjusted EBITDA increased 1.6% to $162 million. The adjusted EBITDA margin was 10.4%, expanding 30 bps. We anticipated an adjusted EBITDA margin increase of 50 bps to 10.6% for the quarter under review.FLO’s Financial SnapshotFLO ended its fiscal first quarter with cash and cash equivalents of nearly $7.3 million and long-term debt of $1,790.4 million. Stockholders’ equity at the quarter end was $1,415.6 million.In the fiscal first quarter, cash flow from operating activities totaled $135.6 million and capital expenditures were $25.6 million. The company paid out dividends worth $52.3 million during this time.Image Source: Zacks Investment ResearchSneak Peek Into Flowers Foods' OutlookFor fiscal 2025, management now expects net sales in the range of $5.297-$5.395 billion, indicating a 3.8% to 5.7% increase year over year. This forecast is revised from the previous guidance of $5.403-$5.487 billion, implying a 5.9% to 7.5% increase year over year.Adjusted EBITDA is likely to be in the range of $534-$562 million compared with $560-$591 million projected earlier and $538.5 million recorded in fiscal 2024. For fiscal 2025, adjusted EPS is envisioned in the range of $1.05-$1.15 compared with the earlier view of $1.11-$1.24 and $1.28 delivered in fiscal 2024.Management expects depreciation and amortization in the range of $170-$175 million, while net interest expenses are likely to be $63-$68 million. For fiscal 2025, capital expenditures are expected in the range of $140-$150 million.This Zacks Rank #3 (Hold) stock has lost 6.6% in the past three months compared with the industry’s decline of 0.2%.Better-Ranked StocksNomad Foods Limited NOMD manufactures, markets and distributes a range of frozen food products in the United Kingdom and internationally. It currently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. The Zacks Consensus Estimate for Nomad Foods' current fiscal-year sales and earnings implies growth of 5% and 7.3%, respectively, from the prior-year levels. NOMD delivered a trailing four-quarter earnings surprise of 3.2%, on average.Mondelez International, Inc. MDLZ manufactures, markets and sells snack food and beverage products in Latin America, North America, Asia, the Middle East, Africa and Europe. It presently carries a Zacks Rank of 2 (Buy). MDLZ delivered a trailing four-quarter earnings surprise of 9.8%, on average. The Zacks Consensus Estimate for Mondelez International’s current financial-year sales indicates growth of 4.9% from the year-ago numbers. Oatly Group AB OTLY, an oatmilk company, provides a range of plant-based dairy products made from oats. It presently carries a Zacks Rank of 2. OTLY delivered a trailing four-quarter earnings surprise of 25.1%, on average.The consensus estimate for Oatly Group’s current fiscal-year sales and earnings implies growth of 2.7% and 56.6%, respectively, from the year-ago figures.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Flowers Foods, Inc. (FLO): Free Stock Analysis Report Mondelez International, Inc. (MDLZ): Free Stock Analysis Report Nomad Foods Limited (NOMD): Free Stock Analysis Report Oatly Group AB Sponsored ADR (OTLY): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks