Flowers Foods Q2 2026 Prepared Remarks Earnings Report

Flowers Foods EPS Results

• Actual EPS: $0.21
• Consensus EPS: $0.22
• Beat/Miss: Missed by -$0.01
• One Year Ago EPS: $0.28

Flowers Foods Revenue Results

• Actual Revenue: $1.19 billion
• Expected Revenue: $1.23 billion
• Beat/Miss: Missed by -$36.32 million
• YoY Revenue Growth: -4.00%

Flowers Foods Announcement Details

• Quarter: Q2 2026 Prepared Remarks
• Date: 8/20/2026
• Time: After Market Closes
• Conference Call Date: Thursday, August 20, 2026
• Conference Call Time: 4:00PM ET

Flowers Foods (NYSE:FLO) is one of the largest producers of packaged bakery foods in the United States, offering a variety of fresh bread, buns, rolls, snack cakes and tortillas. Headquartered in Thomasville, Georgia, the company operates an extensive network of bakeries and distribution centers that serve retail grocery chains, convenience stores, mass merchandisers and foodservice customers nationwide. Flowers Foods markets its products under well-known brands such as Nature’s Own, Wonder, Dave’s Killer Bread, Mrs. Freshley’s and European Bakers.

Through its manufacturing and distribution infrastructure, Flowers Foods ensures timely delivery of fresh bakery items across multiple regions, including the Southeast, Mid-Atlantic, Northeast, Midwest and Western United States. The company’s product portfolio is tailored to meet diverse consumer preferences, ranging from traditional white and whole wheat loaves to artisanal-style breads and premium organic offerings. In addition, Flowers Foods provides foodservice clients with customized baked goods designed for restaurants, schools and institutional dining programs.

Founded in 1919 by three brothers in Thomasville, Georgia, Flowers Foods has evolved from a single local bakery into a publicly traded corporation listed on the New York Stock Exchange under the ticker FLO. Over the years, the company has expanded both organically and through strategic acquisitions, adding regional bakeries and specialty brands to its portfolio. This growth strategy has solidified its presence in key U.S. markets and enhanced its product diversity.

Leadership at Flowers Foods is led by Chairman, President and Chief Executive Officer Allen L. Shiver, who oversees corporate strategy, operations and brand development. Under Shiver’s guidance, the company continues to focus on efficiency improvements, innovation in product development and sustainable practices within its production and supply chain. Flowers Foods remains committed to maintaining the freshness, quality and consistency that consumers and customers expect from its bakery brands.

Flowers Foods Q2 2026 Prepared Remarks Earnings Call Transcript

Key Takeaways

• Negative Sentiment: Second-quarter results missed expectations: net sales fell 4%, volume declined 5.8%, adjusted EBITDA dropped 19% to $111 million, and adjusted diluted EPS decreased to $0.21 from $0.30.
• Negative Sentiment: Flowers Foods lowered its full-year 2026 outlook, now expecting net sales of $5.07 billion-$5.142 billion, adjusted EBITDA of $453 million-$481 million, and adjusted diluted EPS of $0.75-$0.85, reflecting persistent consumer pressure and competitive intensity.
• Positive Sentiment: Several growth areas showed momentum, including Simple Mills, where retail sales rose 13%, cookies grew 39%, and crackers increased 8%; Nature’s Own Perfectly Crafted sales also grew more than 8%, while Wonder Cake gained 60 basis points of unit share.
• Positive Sentiment: Management expects cost actions to generate approximately $9 million of savings in the remainder of 2026 and about $20 million in annualized run-rate savings after implementation, despite one-time costs of approximately $6 million-$9 million.
• Positive Sentiment: The company paid down roughly $70 million of debt year to date and secured a new $400 million delayed-draw facility to fully de-risk its October 2026 bond maturity, while continuing to fund dividends and invest in brands and innovation.

Presentation

[J.T. Rieck, EVP of Finance and Investor Relations at Flowers Foods]

Hello, everyone. This is J.T. Rieck, EVP of Finance and Investor Relations. Welcome to the pre-recorded discussion of Flowers Foods' second quarter 2026 results. We will host a live Q&A session Friday, August 21st at 8:30 A.M. Eastern. Further details about the live call, along with our earnings release, a transcript of these recorded remarks, and a related slide presentation are posted on the investors section of flowersfoods.com. Before we get started, keep in mind that the information presented here may include forward-looking statements about the company's performance. Although we believe these statements to be reasonable, they are subject to risks and uncertainties that could cause actual results to differ materially. In addition to what you hear in these remarks, important factors relating to Flowers Foods' business are fully detailed in our SEC filings. Providing remarks today are Ryals McMullian, Chairman and CEO, and Anthony Scaglione, our CFO.

[J.T. Rieck, EVP of Finance and Investor Relations at Flowers Foods]

Ryals, I'll turn it over to you.

[Ryals McMullian, Chairman and CEO at Flowers Foods]

Thanks, J.T., and thanks to everyone for joining us today. Our second quarter results reflect the continued challenges across the fresh packaged bread category, as ongoing pressure on household budgets, evolving consumer purchasing behavior, and continued competitive dynamics created a more difficult operating environment than anticipated. While we expected many of these headwinds to persist, their pace and magnitude intensified during the quarter, contributing to softer demand across much of our portfolio and results that fell short of our expectations. The pressure was concentrated in several identifiable areas. Continued strain on household budgets has driven greater price sensitivity and trade-down activity. At the same time, consumer purchasing shifted across formats, package sizes, and product attributes where we are still building scale. Those shifts were compounded by consistent promotional intensity and strong competition across pricing and assortment. Together, these factors pressured volume and contributed to a 4% decline in sales.

[Ryals McMullian, Chairman and CEO at Flowers Foods]

Against this backdrop, we are accelerating initiatives already underway to strengthen the business. Insights gained during the quarter and through our comprehensive review have sharpened our priorities and are helping us move faster to strengthen competitiveness, improve execution, advance innovation, and prioritize the highest-value opportunities. Recognizing the continued volatility in the economic environment, those insights are translating into focused actions to help stabilize and improve our performance. Importantly, we are already seeing these efforts generate tangible commercial momentum. Recent progress includes new business wins, entry into new markets, and key wins in away-from-home and cake categories, which we expect to contribute meaningfully to sales as those opportunities fully ramp. To build our category leadership, we are accelerating innovation, including expanded half-loaf offerings and new sourdough varieties that better align with consumer preferences.

[Ryals McMullian, Chairman and CEO at Flowers Foods]

We're strengthening in-store execution using technology and evaluating AI applications to help improve promotional effectiveness and selectively refining our price pack architecture to enhance competitiveness and support profitable growth. We also continue to invest behind our leading brands, including the Nature's Own relaunch, which is currently in its early stages but is receiving positive feedback from customers and consumers. Now let me turn to our brand portfolio and the actions underway across key categories. Our strategic focus remains centered on strengthening our leading brands and investing in innovation that meets the evolving needs of consumers. While the quarter was pressured across much of the portfolio, we saw bright spots in select areas of premium and specialty loaf, buns and rolls, breakfast, cake, and better-for-you snacking. These areas helped offset some of the continued weakness in loaf, where we underperformed in both dollars and units.

[Ryals McMullian, Chairman and CEO at Flowers Foods]

Within traditional loaf, category trends remained pressured as constrained household budgets and heightened competitive activity increased trade-down behavior and weighed on overall demand. At the same time, consumers continued to shift towards smaller loaves and more differentiated products, areas where we are still building scale. These dynamics, along with lower consumption, impacted our performance at the category level in both Nature's Own and Wonder in the quarter. However, a key bright spot was Nature's Own Perfectly Crafted, which increased sales by over 8%, gaining in both dollar and unit share. This points to the value of innovation with sourdough and Italian herb helping to expand the franchise and drive incremental growth. Against this backdrop, we are taking focused actions to strengthen our position. The relaunch of Nature's Own is a key step in that process.

[Ryals McMullian, Chairman and CEO at Flowers Foods]

As we said last quarter, this is the first major launch of our flagship brand in well over a decade. While we expect it will take time to build consumer awareness and drive benefits through the business, we believe the relaunch strengthens our position as we move forward. Early feedback from customers has been very positive, and we are encouraged by the response to the brand's better-for-you positioning, fewer and simpler ingredients, and non-GMO project verified offering at national scale. The relaunch is in its early stages, and while sales gain momentum, we're focused on building awareness, securing displays, improving shelf communication, and supporting the brand across the full path to purchase. The marketing campaign, including our spokesperson John Cena, is beginning to generate stronger consumer engagement and positive social media feedback.

[Ryals McMullian, Chairman and CEO at Flowers Foods]

We are also encouraged by Nature's Own ingredient and health perception credentials, including favorable scores from third-party nutrition and product rating platforms such as the Yuka app. While the relaunch is still in its early stages, we expect it to support greater stability and improved performance as awareness builds and execution gains traction. With its scale, trust, and differentiated positioning, Nature's Own provides a strong platform to recapture share and extend our category leadership. We also see a meaningful opportunity in smaller pack sizes, including small and half loaves, which are areas we are positioned to build meaningful scale. Consumer preferences are increasingly shifting towards portion control, affordability, and reduced waste, identifying a clear opportunity to improve execution in this area. Accelerating our presence in small and half loaves will be an important part of our plan to improve performance and better align the portfolio where consumer demand is moving.

[Ryals McMullian, Chairman and CEO at Flowers Foods]

Moving to sandwich buns and rolls, our Nature's Own brand performed very well. Nature's Own gained 30 basis points of dollar share and 20 basis points of unit share in the quarter. The fact that dollar share grew above the rate of unit share demonstrates continued consumer acceptance of the brand's premium positioning and pricing within the segment. Nature's Own Perfectly Crafted was the primary driver and continued to build momentum, increasing dollar sales and gaining 20 basis points of unit share in the quarter, helping offset some of the pressure on our overall performance in the category. During the July 4th holiday period, we held unit share and grew dollar share during this important seasonal window. This reinforces our belief that when supported by the right merchandising, display activity, and customer execution, our leading brands continue to resonate with consumers.

[Ryals McMullian, Chairman and CEO at Flowers Foods]

In organics, Dave's Killer Bread experienced pressure on both unit and dollar share during the quarter. Consumption declined as we pulled back on planned marketing investments, while shifts in consumer preferences, heightened competition, and consumer price sensitivity created additional pressure. DKB remains the organic segment leader, and we continue to see significant growth potential supported by its differentiated brand equity, organic positioning, and strong consumer loyalty. To capture that opportunity, we are refining our messaging to build greater awareness of DKB's better-for-you attributes while supporting the brand through innovation, expanded distribution, and advertising. Canyon Bakehouse, the leading gluten-free brand, gained both unit and dollar share, demonstrating the brand's important role within our broader better-for-you portfolio. In Nature's Own Keto, we gained dollar share, demonstrating strength in the category as consumers continue to look for products that support specific dietary and functional needs.

[Ryals McMullian, Chairman and CEO at Flowers Foods]

Despite broader category pressures, our leadership across organic, gluten-free, and other differentiated offerings remains highly relevant and provides a strong platform to meet evolving consumer needs. In breakfast, while overall share was modestly lower, we saw encouraging momentum in select areas. Wonder gained 20 basis points in both unit and dollar share, supported by expanded distribution that helped drive nearly 100% growth in both units and dollars versus the prior year. That strength was offset by softer performance in DKB. Even so, we continue to view breakfast as an attractive long-term growth opportunity supported by continued distribution gains, targeted innovation, and improved execution. The relative performance of our brands in this segment also underscores the value of having a diversified portfolio across price points, giving us multiple ways to participate as consumer preferences and spending patterns evolve.

[Ryals McMullian, Chairman and CEO at Flowers Foods]

In cake, we generally held share in the category, supported by another strong quarterly performance from our Wonder-branded offerings. Wonder Cake was a clear standout, gaining 60 basis points of unit share while also growing dollar share, underscoring the brand's strong consumer relevance and the important role our cake business can play within the broader portfolio. Wonder's continued momentum gives us a strong foundation from which to build in this category. Turning to better-for-you snacking, we continue to be encouraged by our platform anchored by Simple Mills and Dave's Killer Bread, with differentiated products that are well-positioned to meet consumer demand. Simple Mills delivered solid growth in the quarter, supported by broad-based momentum across the portfolio, strong underlying consumer demand, and an encouraging initial response to this year's innovation launches.

[Ryals McMullian, Chairman and CEO at Flowers Foods]

Retail sales increased 13%, driven by strength in cookies and crackers, reinforcing the resilience and appeal of the brand. Cookies grew 39% and crackers grew 8% in the quarter, both outpacing their respective categories. This performance was driven by a combination of distribution expansion, e-commerce performance, and strong velocities on core lines in the food and mass channels. Recent innovation launches have exceeded distribution goals and delivered promising early results, reinforcing our confidence that Simple Mills' growth will accelerate through the balance of 2026. Suffice it to say, we are pleased with the strong performance at Simple Mills and remain confident in the brand's long-term growth opportunity. DKB bars and mini bites continue to generate strong consumer interest during the quarter. We're working to improve product availability and service levels to better meet demand and support growth through the balance of the year.

[Ryals McMullian, Chairman and CEO at Flowers Foods]

Turning to our outlook, given our first-half performance and the category backdrop, we're updating our full-year guidance to reflect a more conservative outlook for the balance of the year. At the same time, our comprehensive review is giving us a clearer perspective on market dynamics, portfolio opportunities, and the actions required to improve performance. We're taking targeted steps to strengthen competitiveness, sharpen execution, reduce cost, and better align resources with the opportunities that can create the greatest long-term value. Consistent with these priorities, we're executing additional cost actions designed to improve efficiency, reduce our cost base, and better align our operating structure with customer needs and current market realities. While difficult, we expect these actions to create a more agile organization and better position Flowers for profitable growth over time.

[Ryals McMullian, Chairman and CEO at Flowers Foods]

With that, I'll hand it over to our CFO, Anthony Scaglione, for additional details and a review of our financial results.

[Anthony Scaglione, CFO at Flowers Foods]

Thanks, Ryals, and good morning, everyone. I'll spend a few minutes on our second quarter results, the actions we are taking to manage through the current environment, and how we are thinking about the balance of 2026. As Ryals outlined, our second quarter results reflected a challenging category backdrop with continued pressure on consumers, softer demand, and evolving preferences that weighed on volume and mix. Throughout the quarter, we managed costs carefully, protected financial flexibility, and advanced initiatives from our comprehensive review that we believe will strengthen performance through the balance of 2026 and beyond. For the quarter, net sales decreased 4% from the prior year period. Volume was down 5.8%, reflecting the challenging environment in the fresh packaged bread category and the continued pressure in traditional loaf and certain premium loaf categories, which offset favorable price mix.

[Anthony Scaglione, CFO at Flowers Foods]

Breaking this down further, branded retail sales declined 3.8%, driven by lower volume, partially offset by positive price mix. Other net sales decreased 4.4% on lower volume and store-branded retail sales. Gross margin, excluding depreciation and amortization, was 48.4% of sales, down 40 basis points from the prior year. The decline was driven by lower operating leverage from reduced volumes and increased outside purchases, net of lower ingredient costs related to Simple Mills. On an adjusted basis, SD&A increased 140 basis points as a percentage of sales, primarily reflecting lower sales against higher relative marketing, labor, and logistics costs. These pressures were partially offset by lower distributor discounts and continued cost discipline. While top-line weakness drove P&L deleverage, we remain deliberate in our spending, prioritizing cost initiatives while continuing to invest behind our leading brands. Adjusted EBITDA declined 19% to $111 million, representing 9.3% of net sales.

[Anthony Scaglione, CFO at Flowers Foods]

GAAP diluted EPS for the quarter was $0.19, a $0.09 decrease over the prior year period. Excluding the items affecting comparability detailed in the release, adjusted diluted EPS in the quarter was $0.21, compared to $0.30 in the prior year period. Our first-half results were clearly below our expectations, and we are taking targeted actions to help stabilize performance in the back half of the year, which I will address momentarily. From a balance sheet and cash flow perspective, our focus remained on preserving flexibility and maintaining a disciplined approach to leverage. We continue to improve our balance sheet and have paid down approximately $70 million in debt year-to-date. Our financial strength remains a priority, and as a reminder, we have secured a new $400 million delayed draw facility to fund the maturity of our bonds coming due in October of 2026, completely de-risking that maturity.

[Anthony Scaglione, CFO at Flowers Foods]

We will continue to prioritize investments that support attractive returns, fund the dividend, and strengthen the balance sheet over time. Turning to cash flow, we generated $242 million in cash flow from operating activities year-to-date, while investing $44 million in capital expenditures and returning $81 million to shareholders through dividends. Now moving to full-year guidance. Given our results in the first half of the year against the current category backdrop, we are revising our full year 2026 outlook to reflect those realities. We now expect net sales to be in the range of $5.07 billion-$5.142 billion, adjusted EBITDA to be in the range of $453 million-$481 million, and adjusted diluted EPS to be in the range of $0.75-$0.85 per share.

[Anthony Scaglione, CFO at Flowers Foods]

Our updated outlook reflects what we know today and assumes the current macroeconomic backdrop, with market and competitive conditions remaining generally consistent throughout the balance of the year. It also includes contribution from recent new business customer wins, as well as building momentum and changing the recent trajectory from Nature's Own's relaunch. Additionally, it reflects the actions we are taking to improve performance, including cost controls, reorganization savings, targeted brand investment, innovation launches, and related execution. Before I turn it back to Ryals, I want to update you on our comprehensive review and the initiatives we are executing in the second half. The comprehensive review is helping us sharpen priorities, improve execution, and better align our cost structure and resources with the opportunities where we see the strongest long-term returns. It is also identifying practical actions to simplify how we operate, strengthen competitiveness, and build a more efficient operating model.

[Anthony Scaglione, CFO at Flowers Foods]

We are making meaningful progress. Earlier this year, we realigned our DSD network and the territory it serves, and we are actively pursuing growth opportunities across retail and away-from-home channels, including food service and QSR customers, where we see room to expand over time. As part of the review, we are taking select actions that further realign the organization and improve our cost structure. This builds on the cost efficiency work we have pursued over the past several years, during which the company has removed more than $200 million of costs from the business. Our focus now is on becoming more agile, reducing complexity, and aligning our structure with customer needs and the growth opportunities where we have the right to win.

[Anthony Scaglione, CFO at Flowers Foods]

Based on the current estimates, we expect approximately $9 million of savings for the balance of this year and approximately $20 million of annualized run rate savings once fully implemented, including certain reinvestments. To achieve these savings, we expect one-time costs of approximately $6 million. As we look toward 2027, we recognize certain headwinds are increasing from today, namely commodity ingredient exposure and fuel. We remain vigilant in implementing actions to help mitigate some of this risk, including expanding our hedging programs and improving our price pack architecture to better align with consumer preferences. This work will lead to a more stabilized cost input from a planning standpoint, as well as opportunities to offer our best-selling brands in the smaller loaf size and ensure our snack packs are appropriately sized for consumer demand.

[Anthony Scaglione, CFO at Flowers Foods]

Collectively, these actions are designed to help us navigate the current environment, improve execution, and strengthen profitability through the balance of 2026 and into 2027. They also support the broader priorities Ryals discussed, strengthening our leading brands, improving in-store execution, accelerating innovation, and focusing capital and resources on the areas with the most attractive long-term returns. In closing, while market conditions remain challenging, we are taking the right initiatives and moving with discipline and focus. I remain confident in the long-term strength of our business, our strategy, our brands, and our team. With that, I will turn the call back over to Ryals for closing remarks.

[Ryals McMullian, Chairman and CEO at Flowers Foods]

Thanks, Anthony. To close, while our second-quarter performance was below our expectations, we have a clear understanding of the market dynamics affecting the business and the actions required to improve performance. Consumers remain under pressure and purchasing behavior continues to evolve. Our comprehensive review has sharpened our perspective on where our portfolio is strongest, where we need to improve, and where we can move faster to better serve customers. We are building upon initiatives already underway, advancing them with discipline and focus to strengthen execution across our business. With our capable team and a clear strategy, we remain confident in our ability to improve performance over time. That concludes our prepared remarks.

Participants

Executives

• J.T. Rieck, EVP of Finance and Investor Relations
• Ryals McMullian, Chairman and CEO
• Anthony Scaglione, CFO