Flowers Foods Reports Results, Outlines Future Expectations

Flowers Foods, Inc. Reports Third Quarter 2024 Results

Today, Flowers Foods, Inc. (NYSE: FLO) released its financial performance for the 12-week third quarter, demonstrating a resilient business landscape despite facing challenges. The results show a slight decrease in net sales, reflecting current market dynamics but also presenting an overall positive trend in profitability, thanks to strategic decisions made by the company.

Third Quarter Summary

In this report, key metrics indicate that:

• Net sales slightly decreased by 0.7% to $1.191 billion, where the pricing/mix effect was unable to counterbalance volume declines.
• Net income saw a considerable rise from $65.0 million to $111.7 million, mainly driven by improved operating income and reduced legal settlements.
• Adjusted net income increased by 12.4% to $69.3 million, highlighting the efficacy of operational improvements.
• Adjusted EBITDA grew by 10% to reach $133.3 million, marking a 110-basis point increase in margin as a percentage of net sales.
• Diluted earnings per share (EPS) increased to $0.31, up from $0.53, and adjusted diluted EPS saw an increase to $0.33.

CEO Insights

Chairman and CEO Ryals McMullian remarked on the company's good performance, stating, "Our leading brands are performing well. Our successful execution of cost initiatives and portfolio strategy enabled us to achieve better-than-expected earnings this quarter. Despite an environment where consumers are facing pressures, we have managed to maintain a strong position in the bread category, demonstrating robust sales growth in both units and revenue. Furthermore, our focus on improving our away-from-home business has positively impacted profitability, allowing us to add higher-margin accounts as well."

Future Outlook for Fiscal 2024

Looking ahead, the company has updated its financial outlook for fiscal 2024, projecting:

• Net sales to fall between approximately $5.116 billion to $5.147 billion, indicating an expected growth of 0.5% to 1.1% over the previous year.
• Adjusted EBITDA projected between $530 million to $542 million, highlighting continued operational improvement and efficiency.
• Adjusted diluted EPS estimated between $1.24 to $1.28, representing a continued commitment to shareholder value enhancement.

Expectations and Market Dynamics

Flowers Foods’ projections are based on reasonable assumptions concerning depreciation, tax rates, capital expenditure, and overall economic conditions. The developments in the baking industry and fluctuations in consumer preferences remain pivotal to the company’s strategy moving forward.

Financial Activity

The year-to-date analysis through the third fiscal quarter reveals a $25.1 million increase in cash flow from operating activities to $282.4 million. While capital expenditures decreased, dividends paid to shareholders rose, reflecting a commitment to return value to investors while maintaining a healthy balance sheet.

Frequently Asked Questions

What are the key financial results for the third quarter?

For the third quarter, net sales stood at $1.191 billion, and net income was reported at $111.7 million.

How did the company's adjusted earnings fare?

The adjusted net income was $69.3 million, up from the previous year, highlighting operational efficiency.

What insights did the CEO share regarding performance?

CEO Ryals McMullian emphasized strong brand performance and effective cost initiatives that contributed to surpassing earnings expectations.

What are the projected figures for 2024?

The company anticipates net sales of $5.116 to $5.147 billion and adjusted EBITDA in the range of $530 million to $542 million for fiscal 2024.

How did the cash flow situation appear through Q3?

Cash flow from operating activities increased significantly, and dividends paid to shareholders were up by $5.8 million, totaling $152.5 million.

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