Flowers Foods Reports 1.1% Increase in Net Sales, Net Income Declines to $42.1 Million

Flowers Foods, Inc. reported a modest increase in net sales for the sixteen weeks ended April 25, 2026, reaching $1.57 billion, up 1.1% from $1.55 billion in the same period last year. The growth was primarily driven by a 2.3% contribution from the acquisition of Simple Mills, which was completed in February 2025, and a positive price/mix effect of 2.1%. However, this was offset by a 3.3% decline in volume, particularly in the fresh packaged bread category, which has been facing challenges due to changing consumer preferences and increased competition.

The company's net income for the quarter was $42.1 million, a decrease from $53.0 million in the prior year, reflecting a decline in income from operations, which fell to $79.8 million from $85.1 million. This decline was attributed to higher costs associated with outside purchases of products related to Simple Mills, increased legal settlements, and restructuring charges. Additionally, interest expenses rose significantly, contributing to the overall decrease in profitability. The effective tax rate also increased to 30.0% from 25.6%, primarily due to shortfalls related to stock-based compensation.

In terms of operational developments, Flowers Foods has been actively restructuring its operations to improve efficiency. The company incurred $9.9 million in restructuring charges during the quarter, which included costs related to a reduction-in-force and implementation expenses. The company is also focusing on enhancing its product offerings, with new introductions in the Nature's Own brand and continued innovation from Simple Mills. The integration of Simple Mills is expected to bolster the company's presence in the better-for-you snacking category.

On the financial front, Flowers Foods generated $107.9 million in cash flows from operations, a decrease from $135.6 million in the prior year. The company invested $20.6 million in capital expenditures and paid $54.4 million in dividends during the quarter. As of April 25, 2026, the company had total available liquidity of $1.07 billion, which includes cash on hand and available credit facilities. The company has also entered into a $400 million term loan facility to refinance its upcoming debt obligations, demonstrating a proactive approach to managing its capital structure.

Looking ahead, Flowers Foods anticipates that sales for Fiscal 2026 will be lower than in Fiscal 2025 due to the additional week in the previous fiscal year and ongoing challenges in the fresh packaged bread category. However, the company expects that the contributions from the Simple Mills acquisition and growth in differentiated products will help mitigate some of the anticipated declines. The company remains focused on executing its strategic priorities while navigating the complexities of the current economic environment.