Flowers Foods Reports Slight Revenue Increase and Plans Acquisition of Simple Mills

Flowers Foods, Inc. reported a slight increase in revenue for the fiscal year ending December 28, 2024, with net sales reaching $5.1 billion, up 0.2% from $5.09 billion in the previous year. The growth was primarily driven by a 1.8% increase in price/mix, which was partially offset by a 1.7% decline in volume. The company’s income from operations significantly improved to $348.3 million, compared to $172.9 million in fiscal 2023, largely due to a reduction in legal settlements and related costs, which fell by $133.7 million. Net income also saw a substantial increase, rising to $248.1 million from $123.4 million in the prior year.

In terms of strategic developments, Flowers Foods announced its intention to acquire Simple Mills, a maker of better-for-you snacks, for approximately $795 million. This acquisition, expected to close in the first quarter of fiscal 2025, aims to enhance the company's presence in the health-conscious snacking segment. Additionally, the company completed the acquisition of Papa Pita in February 2023 for $274.8 million, which has expanded its production capacity and distribution reach in the western U.S.

Operationally, Flowers Foods faced challenges, including labor shortages and increased costs, which impacted production efficiency. The company reported an employee headcount of approximately 10,200 as of December 28, 2024. The company also experienced a decline in customer counts and engagement metrics, particularly in the fresh packaged bread and cake categories, which have seen softness due to inflationary pressures and changing consumer preferences. Despite these challenges, the company’s leading brands, such as Nature's Own and DKB, continued to perform well, with Nature's Own being the best-selling loaf bread in the U.S.

Looking ahead, Flowers Foods anticipates that its sales will benefit from ongoing optimization of its non-retail business, new product innovations, and the additional week in fiscal 2025. However, the company remains cautious about potential headwinds, including shifts in consumer buying patterns and increased competition from store-branded products. The company has also committed to significant capital investments, including an estimated $350 million for an ongoing ERP system upgrade, which is expected to be completed by 2026. Overall, Flowers Foods aims to maintain its strategic focus on brand development, margin prioritization, and disciplined acquisitions to drive future growth.