Flowers Foods Cuts 2026 Sales Outlook After Volume Drop
Second-quarter net sales were $1.193 billion, and the company now expects fiscal 2026 sales of about $5.070 billion to $5.142 billion.
Flowers Foods, Inc. (FLO) cut its fiscal 2026 sales outlook after a second quarter in which volume losses overwhelmed pricing and net sales reversed a modest first-quarter gain.
For the 12 weeks ended July 18, 2026, net sales fell 4.0% to $1.193 billion. Pricing and mix rose 1.8%, while volume declined 5.8%. The prior 16-week first quarter had shown a 1.1% sales increase, helped by the Simple Mills acquisition and pricing.
Chairman and CEO Ryals McMullian said the quarter reflected continued challenges across fresh packaged bread, where macroeconomic pressures, shifting consumer purchasing, and competitive activity created a more difficult environment than the company had anticipated. He said the company is accelerating initiatives to sharpen its value proposition, improve in-store execution, accelerate innovation, win new business, and invest behind leading brands.
Branded Retail net sales decreased $31.7 million, or 3.8%, to $794.6 million. Pricing and mix rose 3.8% and volume fell 7.6%. Other net sales, which include store brands, decreased $18.2 million, or 4.4%, to $398.3 million. That decline reflected inflationary pressure on consumer spending. Pricing and mix in Other fell 1.0% and volume declined 3.4%.
Net income decreased 30.3% to $40.7 million, or 3.4% of sales, a 130-basis-point decrease. Diluted earnings were $0.19 a share. Adjusted net income decreased 30.5% to $44.1 million, and adjusted diluted EPS decreased $0.09 to $0.21. The profit decline was primarily due to the challenging consumer environment, increased marketing expense, and higher labor and freight costs, partly offset by lower interest expense and moderating ingredient costs.
Adjusted EBITDA decreased 19.2% to $111.3 million, or 9.3% of net sales, a 180-basis-point decrease. That followed a 1.8% adjusted EBITDA decline in the first quarter.
Materials, supplies, labor, and other production costs exclusive of depreciation and amortization were 51.6% of net sales, a 40-basis-point increase. The rise was mostly due to lower production volumes, higher labor costs, and outside purchases of product, partly offset by moderating ingredient costs. Selling, distribution, and administrative expenses were 39.7% of net sales, a 160-basis-point increase, from higher workforce-related and freight costs and increased marketing spend, partly offset by lower distributor distribution fees. Adjusted SD&A was 39.1% of sales, a 140-basis-point increase. Net interest expense decreased $1.3 million, primarily due to lower debt balances.
Given first-half performance and the category environment, the company is updating its full-year outlook to a more cautious view for the balance of 2026. For the 52-week fiscal year, it now expects net sales of approximately $5.070 billion to $5.142 billion, a -3.5% to -2.2% change versus the prior year, compared with prior guidance of $5.163 billion to $5.267 billion. Adjusted EBITDA is now expected at approximately $453 million to $481 million, versus prior guidance of $465 million to $495 million. Adjusted diluted EPS is now expected at approximately $0.75 to $0.85 a share, versus $0.80 to $0.90.
McMullian said the Nature’s Own relaunch remains in early stages and has not yet meaningfully contributed to results. He said early feedback from customers and distribution partners has been excellent around simpler ingredients, a stronger better-for-you positioning, and a Non-GMO Project Verified offering at national scale. The company is taking select actions to further realign the organization and improve its cost structure, as part of a comprehensive review, to simplify operations and improve execution.
Cash and cash equivalents were $52.8 million at quarter end. Year-to-date cash flow from operating activities was $241.5 million, capital expenditures were $44.5 million, and dividends paid were $81.0 million.