Flowers Foods, a prominent player in the packaged bakery industry, has recently released its fiscal second-quarter earnings report, showcasing adjusted earnings that surpassed expectations despite a disappointing revenue figure. During the three-month period concluding on July 13, the company reported adjusted earnings of $0.36 per share, an increase from last year’s $0.33, aligning closely with the consensus projected by Capital IQ for the current quarter. However, while the adjusted earnings showed positive growth, sales in the quarter dipped slightly to $1.225 billion, down from $1.228 billion in the previous year, falling short of analysts' expectations which had set revenue at $1.24 billion.
This decline can be attributed to an overall volume drop of 1.2% within the market. Flowers Foods is well-known for its diverse array of brands, including notable names such as Dave's Killer Bread and Canyon Bakehouse. During this quarter, branded retail sales experienced a modest increase of 0.3% year over year, climbing to $789.5 million.
This growth was largely driven by a shift in consumer preference toward premium-priced products, a trend that continues to shape the market landscape. Conversely, revenue from other segments faced a decline of 1.2%, totaling $435.5 million, as the company reduced its exposure to the lower margin foodservice business, a strategic exit undertaken in the latter half of fiscal 2023 due to volume reductions. Looking ahead, Flowers Foods has reaffirmed its expectations for 2024, projecting revenues to range between $5.09 billion and $5.17 billion.
In terms of adjusted earnings per share (EPS), the company anticipates a figure between $1.20 and $1.30. Analysts canvassed by Capital IQ predict a more conservative $1.22 EPS with anticipated revenues of around $5.15 billion for the fiscal year. Chief Executive Ryals McMullian commented on the company’s outlook, emphasizing, "We are maintaining our 2024 financial outlook, which incorporates continued strong operational performance balanced with the potential impact on consumer and promotional behavior from an uncertain economic environment.
We also expect full year results to benefit from new business wins and additional cost savings." This statement reflects a commitment to navigating market challenges while leveraging growth opportunities. Additionally, the company has made strides in managing its operational costs, with selling, distribution, and administrative expenses decreasing to $471.4 million for the quarter, slightly down from $475.9 million in the comparable period last year. As of now, shares of Flowers Foods are trading at $22.70, marking a change of +0.04, which represents a percent change of +0.18.
Investors will be keenly observing how the company maneuvers through these market dynamics moving forward..