Flowers Foods, Inc. (NYSE:FLO), a packaged bakery company, reported weaker-than-expected second-quarter sales and issued its second straight guidance cut, prompting analysts to scale back forecasts and warn of ongoing category headwinds.
Truist Securities analyst Bill Chappell lowered his 12-month price forecast to $15 from $20 while reiterating a Hold rating. He reduced sales and earnings estimates through fiscal year 2027, pointing to Flowers’ inconsistent execution and intensifying private label competition.
Chappell argued that while branded bread demand remains a structural tailwind, the stock is likely to remain range-bound until the private label segment shows clearer direction. His revised target reflects about 14x 2026 EPS, a discount to peers trading closer to 18x, which he sees as justified by slow growth and modest margins.
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DA Davidson analyst Brian Holland also struck a cautious tone, saying the back-to-back guidance cuts highlight mounting consumer and competitive pressures that innovation and acquisitions have yet to offset.
He noted that the Simple Mills acquisition added leverage without delivering near-term benefits, leaving Flowers more exposed to execution risks. Holland now projects fiscal year 2025 EBITDA of $512–$538 million and sales of $5.239–$5.308 billion, both trimmed from prior forecasts.
Holland argued that while the reset may help de-risk the second half, Flowers’ reliance on packaged bakery leaves few quick fixes, with risks ranging from irrational pricing to M&A execution and legal liabilities.
In its quarterly update, Flowers reported an adjusted EPS of 30 cents, in line with the consensus, on $1.242 billion in sales, shy of Wall Street estimates. Net income fell nearly 13%, while adjusted EBITDA declined 4%.
CEO Ryals McMullian acknowledged that shifting consumer demand and macroeconomic uncertainty continue to pressure the bread category, but said cost-saving measures are being deployed to help offset the weakness.
The company cut its full-year EPS outlook to $1.00–$1.10 and lowered its sales guidance to $5.021–$5.083 billion, both below Street expectations.
Price Action: FLO shares are trading higher by 0.54% to $15.78 at Monday’s last check.
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