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Flowers Foods, Inc. (NYSE: FLO) has reported its financial results for the third quarter of 2024, marking a period of mixed performance. The company experienced a slight decline in net sales, which decreased by 0.7% to $1.191 billion. This drop was attributed to a positive pricing/mix being overshadowed by a decline in volume.
Despite this, Flowers Foods saw a significant improvement in net income, which increased by $111.7 million to reach $65.0 million. This increase was primarily driven by a growth in operating income due to reduced legal settlements and related costs, although it was partially offset by higher net interest expenses. Adjusted net income rose by 12.4% to $69.3 million, and adjusted EBITDA increased by 10.0% to $133.3 million, representing 11.2% of net sales, a 110-basis point increase.
Flowers Foods, Inc. Reports Better than Expected Results for Third Quarter of 2024
The company’s performance in the third quarter exceeded earnings expectations, with diluted EPS rising by $0.53 to $0.31. Adjusted diluted EPS also saw an increase, rising by $0.04 to $0.33, surpassing the expected EPS of $0.2939. This positive outcome was attributed to the strong performance of Flowers Foods’ leading brands and the successful execution of cost initiatives and portfolio strategies.
Ryals McMullian, chairman and CEO of Flowers Foods, highlighted that the company outpaced the bread category, achieving growth in tracked channel sales in both units and dollars despite challenges posed by a pressured consumer environment. The implementation of the portfolio strategy further enhanced performance in the away-from-home business, improving profitability and adding higher-margin new accounts.
When comparing the current performance against expectations, Flowers Foods’ results were notably better than anticipated. The expected revenue for the quarter was $1.2 billion, and the company reported actual revenue of $1.191 billion, slightly below expectations. However, the company surpassed the expected EPS of $0.2939 with an actual EPS of $0.31, indicating a robust performance in terms of profitability.
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Flowers Foods, Inc. Adjusts Financial Guidance for Fiscal Year 2024
Flowers Foods has adjusted its financial guidance for the fiscal year 2024, reflecting greater certainty as it enters the fourth quarter. The company now expects net sales to range between approximately $5.116 billion and $5.147 billion, representing 0.5% to 1.1% growth compared to the prior year. This is a slight narrowing from the previous guidance range of $5.091 billion to $5.172 billion.
Adjusted EBITDA is forecasted to be between $530 million and $542 million, compared to prior guidance of $524 million to $553 million. Adjusted diluted EPS is expected to be in the range of $1.24 to $1.28, slightly narrowing from the previous guidance of $1.20 to $1.30. The company’s outlook assumes depreciation and amortization expenses between $155 million and $160 million, net interest expense of approximately $20 million to $24 million, and an effective tax rate of around 25%.
Disclaimer: The author does not hold or have a position in any securities discussed in the article.
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