Flowers Foods Inc is an American company producing bakery food for retail and foodservice across the United States. The product portfolio includes fresh breads, buns, rolls, snack cakes, and tortillas. The company distributes to supermarkets, convenience stores, and restaurants. The key brands are Nature's Own, Whitewheat, Cobblestone Bread, Wonder, Dave's Killer Bread, Canyon Bakehouse, Mrs. Freshley's, and Tastykake.
Performance Overview
In the second quarter of 2024, Flowers Foods Inc (FLO, Financial) reported a slight decrease in sales but managed to achieve a notable increase in net income. Sales decreased by 0.2% to $1.225 billion, slightly missing the estimated revenue of $1.228 billion. However, the company reported a 5.0% increase in net income to $67.0 million, with adjusted net income rising by 6.5% to $75.5 million. Diluted EPS increased by $0.02 to $0.32, surpassing the estimated earnings per share of $0.29.
Financial Achievements
Flowers Foods Inc (FLO, Financial) achieved several financial milestones in Q2 2024:
- Adjusted EBITDA increased by 7.8% to $143.5 million, representing 11.7% of sales, a 90-basis point increase.
- Branded Retail sales increased by $2.3 million or 0.3% to $789.5 million due to favorable price/mix resulting from a shift in mix to more premium-priced products.
- Materials, supplies, labor, and other production costs decreased as a percentage of sales to 50.1%, a 90-basis point decrease.
Income Statement Highlights
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Sales | $1.225 billion | $1.228 billion |
| Net Income | $67.0 million | $63.8 million |
| Diluted EPS | $0.32 | $0.30 |
| Adjusted EBITDA | $143.5 million | $133.1 million |
Balance Sheet and Cash Flow
As of July 13, 2024, Flowers Foods Inc (FLO, Financial) reported total assets of $3.428 billion, with cash and cash equivalents amounting to $6.9 million. The company’s long-term debt stood at $1.069 billion. Year-to-date, cash flow from operating activities increased by $39.5 million to $168.4 million, while capital expenditures decreased by $7.1 million to $61.3 million.
CEO Commentary
“We continued to execute well in the second quarter with a solid top- and bottom-line performance,” said Ryals McMullian, chairman and CEO of Flowers Foods. “Our brands outperformed the fresh packaged bread category, growing units in tracked channels and generating leading unit and dollar share gains. Private label and away-from-home margins maintained their positive trajectory as we improved profitability in existing accounts and filled available capacity with new, higher-margin business. And savings initiatives are taking hold, driving a meaningful sequential improvement in costs.”
Analysis
Flowers Foods Inc (FLO, Financial) demonstrated resilience in the face of volume declines, primarily due to business exits. The company's ability to increase net income and adjusted EBITDA despite a slight decrease in sales highlights its effective cost management and strategic focus on higher-margin products. The increase in branded retail sales and the reduction in production costs are positive indicators of the company's operational efficiency.
Overall, Flowers Foods Inc (FLO, Financial) has shown strong financial performance in Q2 2024, with significant improvements in profitability metrics. The company's focus on premium-priced products and cost-saving initiatives are expected to drive future growth and profitability.
Explore the complete 8-K earnings release (here) from Flowers Foods Inc for further details.
