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FLOWERS FOODS INC (FLO)·Q2 2026 Earnings Summary

Executive Summary

  • Q2 2026 results have not been reported; Wall Street consensus expects revenue of $1.24B and EPS of $0.28, broadly flat year over year versus Q2 2025 actuals ($1.243B revenue, $0.28 EPS)* .
  • FY 2025 guidance was narrowed last quarter: net sales $5.254–$5.306B, adjusted EBITDA $515–$532M, and adjusted diluted EPS $1.02–$1.08, with capex lowered to $120–$130M .
  • Category headwinds persisted in recent quarters (pricing/mix and volume declines, higher outside purchases, and higher interest expense), while Simple Mills contributed to sales and adjusted EBITDA but was dilutive to EPS .
  • Management continues to push innovation and portfolio transformation (better-for-you, value, small loaves, snacking), and expects margin progress longer term despite near-term pressure from new product launch cadence .

What Went Well and What Went Wrong

  • What Went Well

    • “Leading brands continue to demonstrate strong relative performance amid ongoing challenges in the bread category,” with DKB and Canyon growing unit share; small loaves gained rapidly, achieving #2 market share .
    • Specialty premium loaf units grew 4% with record share, while category declined; DKB and Canyon gained 180 and 30 bps of share respectively .
    • FY 2025 outlook narrowed modestly higher on net sales and adjusted EBITDA vs. Q2 guidance, indicating improved visibility heading into year-end .

  • What Went Wrong

    • Bread category softness: pricing/mix and volume declines across quarters; traditional loaf under pressure; “generational shift” reshaping demand .
    • Margin compression from increased outside purchases, lower price/mix, and lower production volumes; materials cost rose as % of sales (Q2: 51.2%; Q3: 52.1%) .
    • Higher interest expense from Simple Mills acquisition debt reduced net income and EPS in Q2 and Q3 2025 .

Financial Results

Recent quarterly actuals and Q2 2026 consensus (oldest → newest):

MetricQ1 2025 (16w)Q2 2025 (12w)Q3 2025 (12w)Q2 2026E
Revenue ($USD Billions)$1.554 $1.243 $1.227 $1.242*
Diluted EPS ($USD)$0.25 $0.28 $0.19 $0.28*
Adjusted Diluted EPS ($USD)$0.35 $0.30 $0.23 N/A
Adjusted EBITDA ($USD Millions)$162.0 $137.7 $118.1 $133.2*
Adjusted EBITDA Margin (%)10.4% 11.1% 9.6% N/A
SD&A (% of Net Sales)40.8% 38.1% 38.8% N/A
Materials Cost (% of Net Sales)50.1% 51.2% 52.1% N/A

Values with asterisk are consensus estimates from S&P Global.

Segment net sales (sales class):

Sales ClassQ2 2025 ($USD Millions)Q3 2025 ($USD Millions)
Branded Retail$826.7 $812.8
Other$416.1 $413.8
Total$1,242.8 $1,226.6

KPIs and operational ratios (reported):

  • Materials, supplies, labor and other production costs as % of net sales: Q2 2025 51.2%; Q3 2025 52.1% .
  • SD&A as % of net sales: Q2 2025 38.1% (adjusted 37.7%); Q3 2025 38.8% (adjusted 38.3%) .
  • Net interest expense: Q2 2025 $15.0M; Q3 2025 $14.5M (higher than prior year due to acquisition financing) .

Guidance Changes

MetricPeriodPrevious Guidance (Q2 2025)Current Guidance (Q3 2025)Change
Net SalesFY 2025$5.239B–$5.308B $5.254B–$5.306B Raised top end / narrowed
Net Sales (ex-Simple Mills)FY 2025$5.021B–$5.083B $5.033B–$5.083B Slightly raised low end
Adjusted EBITDAFY 2025$512M–$538M $515M–$532M Raised low end / narrowed
Adjusted EBITDA (ex-Simple Mills)FY 2025$482M–$505M $485M–$499M Raised low end / narrowed
Adjusted Diluted EPSFY 2025$1.00–$1.10 $1.02–$1.08 Raised low end / narrowed
Effective Tax RateFY 2025~25.0% ~24.5% Lowered
Depreciation & AmortizationFY 2025$168M–$172M $168M–$172M Maintained
Net Interest ExpenseFY 2025$58M–$62M $58M–$62M Maintained
Capital ExpendituresFY 2025$135M–$145M $120M–$130M Lowered
Weighted Avg Diluted SharesFY 2025~212.3M ~212.3M Maintained
DividendCurrent$0.2400/share prior$0.2475/share (Nov 2025) Raised

Earnings Call Themes & Trends

TopicPrevious Mentions (Q1 2025, Q2 2025)Current Period (Q2 2026)Trend
Supply chain and ERPResumed ERP rollout; third bakery completed; prudent pace to minimize disruptions . Supply chain aligned with demand; closures and conversions to organic production .N/A (results not yet reported)Continued execution
Tariffs/macroGuidance reflected economic uncertainty and potential tariff costs . Inflationary headwinds; maintained hedging strategy .N/APersistent headwinds
Product performanceBetter-for-you expansion (Nature’s Own Keto, DKB snacking) . Simple Mills adds capability; Q2 ’25 branded retail +5% YoY .N/AStrength in differentiated offerings
Category dynamicsBread category weakness; traditional loaf softness . Intensified competition; softness in store brand volumes .N/AOngoing pressure
Innovation pipelineNew SKUs in snacking; breakfast bars platform; small loaf expansion .N/ARobust pipeline
Distribution/California conversionIncreased workforce and fleet expense tied to CA conversion . SD&A impact noted again in Q3 .N/ATransitional costs

Management Commentary

  • “Flowers’ leading brands continue to demonstrate strong relative performance amid ongoing challenges in the bread category… Our commitment to innovation and focus on leveraging our strong portfolio of brands position us well…” — Ryals McMullian, Chairman & CEO .
  • “We are proactively investing in innovation and M&A to transform our portfolio and align it with consumer demand for better-for-you and value-oriented products.” — Ryals McMullian .
  • “We’re leveraging our leading brands to find pockets of growth… specialty premium loaf units +4%… buns and rolls category units declined 2%, Flowers grew 7%.” — Prepared remarks .
  • “Given difficult industry volume trends combined with additional pressure from tariffs, it is incumbent upon us to adjust our cost base… closures and conversions to higher margin organic production.” — Prepared remarks .

Q&A Highlights

  • Hedging and cost visibility: Maintained historical hedging strategy to increase certainty of ingredient costs 6–12 months out; resumed ERP rollout with a prudent approach to avoid operational risk .
  • FY 2025 Q&A events were scheduled (Nov 7, 2025) but not included in prerecorded remarks; materials posted on investor site .
  • Management emphasized innovation cadence may temporarily pressure margins as new products ramp, with longer-term benefits to category leadership and value creation .

Estimates Context

  • Q2 2026 consensus: Revenue $1.242B*, EPS $0.28*, EBITDA $133.2M*; 5 EPS and 5 revenue estimates in the set; target price consensus $12.71 from 7 estimates* (indicative only).
  • Implication: Consensus suggests broadly flat YoY vs Q2 2025 actuals ($1.243B revenue, $0.28 EPS), pointing to continued category softness offset by portfolio mix and Simple Mills contribution .
MetricQ2 2026E# of Estimates
Revenue ($USD Billions)$1.242*5*
Primary EPS ($USD)$0.28*5*
EBITDA ($USD Millions)$133.2*N/A
Target Price ($USD)$12.71*7*

Values with asterisk are consensus estimates from S&P Global.

Key Takeaways for Investors

  • Near-term setup: Q2 2026 is expected to be flattish YoY on revenue/EPS*, reflecting ongoing bread category pressure and higher financing costs tied to Simple Mills .
  • Mix shift and innovation are the key margin levers; expect temporary margin pressure from launch cadence but longer-term benefits from premium/better-for-you products .
  • FY 2025 guidance trends are constructive at the low end (net sales/adjusted EBITDA/adjusted EPS raised/narrowed), while capex was lowered, signaling disciplined capital allocation .
  • Watch SD&A and materials costs as percent of sales; elevated levels in Q2/Q3 2025 demonstrate sensitivity to outside purchases and price/mix .
  • Simple Mills: additive to net sales and adjusted EBITDA but EPS-dilutive near term; monitor integration milestones and cross-brand innovation .
  • Balance sheet considerations: increased debt and interest expense tied to acquisition; track interest rate environment and deleveraging capacity .
  • Tactical trading: sentiment likely hinges on evidence of improving category demand, new product sell-through, and margin stabilization; dividend increase is a modest support .