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”. 

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.  

Excluding 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.