US baked goods producer Flowers Foods has lowered its full-year outlook as category pressures weighed on first-quarter sales.
Ryals McMullian, the chairman and CEO of Flowers Foods, said the quarter was marked by “economic uncertainty and greater than expected category declines”.
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The company is investing in “on-trend innovation” targeting “faster-growing categories” as an offset, he said, noting the entry of the company’s Dave’s Killer Bread brand into snacking and the recent acquisition of Simple Mills, a US-based biscuit and snack-bar maker.
Nature’s Own brand owner Flowers Foods has forecast net sales of $5.29bn to $5.39bn, reflecting 3.8% to 5.7% growth over the previous year.
Earlier guidance projected net sales of $5.40bn to $5.49bn, indicating a 5.9% to 7.5% year-on-year growth.
In January, Flowers Foods expanded its snack portfolio by acquiring Simple Mills for $795m.
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By GlobalDataExcluding that acquisition, net sales for fiscal 2025 are expected to be between $5.08bn and $5.17bn, representing a decline of 0.5% to growth of 1.3%.
The previous guidance, excluding Simple Mills, estimated net sales of $5.18bn to $5.26bn, or growth of 1.5% to 3%.
Adjusted EBITDA is projected to range from $534m to $562m, compared to the previous estimate of $560m to $591m.
Without the Simple Mills acquisition, adjusted EBITDA is expected to be $504m to $529m, down from the prior guidance of $526m to $554m.
Adjusted diluted EPS is now projected at $1.05 to $1.15, compared to the earlier estimate of $1.11 to $1.24.
Excluding Simple Mills, adjusted diluted EPS is expected to be $1.13 to $1.22, down from the previous $1.18 to $1.28.
McMullian said the company’s adjusted financial guidance “reflects our first-quarter performance, the challenging consumer environment, and potential for increased tariff costs”.
He added: “To improve our near-term results, we are gaining additional shelf space, winning new business, and taking other proactive measures, while evolving our business to enable long-term outperformance.”
Net sales for the quarter ended 19 April dropped to $1.55bn, and net income fell 27.4% to $52.9m.
Adjusted EBITDA climbed 1.6% to $162m, while the margin fell 30 basis points to 10.4%.
Diluted EPS dipped by $0.09 to $0.25.
Simple Mills added $24.3m in net sales along with a net loss of $4.2m, affecting diluted EPS by -$0.02.
Flowers Foods said Simple Mills will contribute $218-225m to the year’s net sales, down from $223-230m previously.
