Flowers Foods Reports Decline in Sales and Net Income Amid Acquisition of Simple Mills

Flowers Foods, Inc. reported a decline in financial performance for the sixteen weeks ended April 19, 2025, with net sales of $1.55 billion, a decrease of 1.4% compared to $1.58 billion in the same period last year. The company attributed this decline to a 2.7% drop in volume and a negative price/mix of 0.3%, which were partially offset by a 1.6% contribution from the acquisition of Simple Mills. Net income fell to $53.0 million, or $0.25 per share, down from $73.0 million, or $0.35 per share, in the prior year, reflecting increased operational costs and higher interest expenses related to the acquisition financing.

The company experienced significant changes in its operational landscape, particularly following the acquisition of Simple Mills on February 21, 2025, for approximately $848.5 million. This acquisition is expected to enhance Flowers Foods' presence in the better-for-you snacking category. The integration of Simple Mills contributed $24.3 million in sales during the first quarter. Additionally, Flowers Foods introduced new products, including Wonder snack cakes, to address weaknesses in the cake category, which had seen declining sales.

Operationally, Flowers Foods reported a total of 44 bakeries in operation as of April 19, 2025, and noted that branded retail sales accounted for 65.1% of total sales, up from 64.4% in the previous year. However, the company faced challenges in the fresh packaged bread category, particularly with traditional loaf breads, which contributed to the overall sales decline. The company is actively monitoring market conditions, including inflationary pressures and changes in consumer behavior, which have affected sales dynamics.

In terms of financial health, Flowers Foods generated $135.6 million in net cash from operating activities during the quarter, compared to $105.1 million in the prior year. The company also reported a significant increase in long-term debt, totaling $1.79 billion as of April 19, 2025, up from $1.02 billion at the end of the previous fiscal year, primarily due to the financing of the Simple Mills acquisition. The company maintains a conservative financial position and believes it has sufficient liquidity to meet its operational needs, with total available liquidity of $592.2 million.

Looking ahead, Flowers Foods anticipates that its sales for Fiscal 2025 will exceed those of Fiscal 2024, driven by the Simple Mills acquisition, new product innovations, and an additional week in the fiscal year. However, the company remains cautious about potential headwinds from changing consumer buying patterns and increased promotional activity in a competitive marketplace.