TLDR
- Q1 adjusted EPS of $0.35 missed expectations; revenue fell 1.4% YoY.
- Net income dropped 27.4% to $53M, pressured by sales decline and rising costs.
- Simple Mills contributed $24.3M in sales but posted a $4.2M net loss.
- 2025 EPS guidance cut to $1.05–$1.15 vs. prior $1.18–$1.28.
- Shares were trading at $17.14 after the results, down 0.41% at press time.
On May 16th, 2025, Flowers Foods, Inc. (NYSE: FLO) reported Q1 results that fell short of expectations. FLO stock was trading at $17.14 following the earnings release, down slightly by 0.41%.
The company posted adjusted earnings per share of $0.35, missing analyst forecasts of $0.38. Revenue fell 1.4% year over year to $1.55 billion, below the $1.60 billion estimate. Net income dropped 27.4% to $53 million due to lower sales, higher SD&A and interest expenses.
Flowers Foods, $FLO, Q1-25. Results:
🔴 -8.8% Pre-Market📊 Adj. EPS: $0.35 🔴
💰 Revenue: $1.55B 🔴
🔎 Simple Mills added revenue but posted a net loss; volume declined, though adjusted EBITDA improved slightly. pic.twitter.com/en9FrYqkVg— EarningsTime (@Earnings_Time) May 16, 2025
Adjusted EBITDA came in at $162 million, up 1.6%, with margin improving 30 basis points to 10.4% of net sales. Diluted EPS was $0.25, down $0.09 year over year.
Simple Mills Acquisition Adds Sales but Cuts Into Profit
The recent acquisition of Simple Mills brought in $24.3 million in revenue for the quarter. However, it resulted in a net loss of $4.2 million and contributed only $3.6 million to adjusted EBITDA.
Its negative impact on adjusted diluted EPS was $0.02, adding to the company’s overall margin pressures. Despite the loss, Flowers Foods sees strategic value in expanding into faster-growing categories through acquisitions like Simple Mills.
Lowered 2025 Outlook Due to Tariff Headwinds and Category Weakness
The company revised its full-year 2025 guidance downward. Adjusted EPS is now expected between $1.05 and $1.15, down from the prior $1.18 to $1.28 range. This compares to a consensus estimate of $1.16.
Total net sales are forecasted at $5.297 billion to $5.395 billion, versus previous guidance of $5.403 billion to $5.487 billion. Excluding Simple Mills, Flowers now expects net sales of $5.079 billion to $5.170 billion—representing flat to modest growth.
Adjusted EBITDA guidance was also cut to $534 million–$562 million, from the earlier $560 million–$591 million range. Excluding Simple Mills, adjusted EBITDA is seen at $504 million–$529 million.
Management Comments and Strategic Efforts
CEO Ryals McMullian emphasized the resilience of its brands and said the company is investing in innovation, targeting growth areas, and working to gain shelf space and new business to offset weakness.
He acknowledged the challenge from tariffs and a tough consumer environment but stressed long-term transformation efforts aimed at driving future outperformance.
Key Financial Assumptions for FY2025
- D&A: $170M–$175M
- Net interest expense: $63M–$68M
- Tax rate: ~25%
- Capital expenditures: $140M–$150M
- 53rd week expected to contribute ~$70M–$80M in sales and ~$0.02 to EPS
While Flowers Foods still sees growth potential through strategic moves, its near-term outlook remains clouded by cost pressures and soft category demand.
