Flowers Foods Cuts 2026 Sales and Earnings Outlook

The Tip Desk · November 12, 2026 · 4 min read

Third-quarter net sales fell 4.7% to $1.169 billion as volume declined 7.0%, and the bakery producer lowered full-year adjusted diluted EPS to $0.63–$0.68.

Flowers Foods, Inc. (FLO), one of the largest U.S. producers of packaged bakery foods, reported that net sales for the 12-week third quarter ended October 10, 2026, fell 4.7% to $1.169 billion, a steeper decline than the 4.0% drop to $1.193 billion in the immediately preceding quarter.

Volume declined 7.0% and pricing/mix rose 2.3%, partially offsetting the 7.0% volume decline, but not enough to prevent net sales from falling. Branded Retail net sales fell 5.1% to $772.1 million, with volume down 8.6% and pricing/mix up 3.5%. Other net sales fell 4.0% to $397.0 million on lower store-brand sales, partly from a discontinued business, with volume down 4.9% and pricing/mix up 0.9%.

Net income decreased 63.6% to $14.4 million, or 1.2% of sales, a 200-basis-point margin decline, versus a 30.3% drop to $40.7 million, or 3.4% of sales, in the prior quarter. Diluted EPS fell $0.12 to $0.07. Adjusted net income decreased 56.0% to $21.4 million and adjusted diluted EPS fell $0.13 to $0.10.

The company said the profit decline was primarily due to lower sales volume, increased marketing investment, higher logistics costs, and greater outside purchases of product, partially offset by lower incentive compensation, lower ingredient costs, and lower distributor distribution fees. Adjusted EBITDA decreased 33.2% to $78.9 million, or 6.8% of net sales, a 280-basis-point margin decline, versus a 19.2% drop to $111.3 million, or 9.3% of sales, in the prior quarter.

Materials, supplies, labor and other production costs (exclusive of depreciation and amortization) were 53.3% of net sales, a 120-basis-point increase. The company said the increase primarily reflected lower production volumes on workforce-related costs and greater outside purchases of product, partially offset by lower ingredient costs. Selling, distribution, and administrative expenses were 40.2% of net sales, a 140-basis-point increase, on greater marketing investments and higher logistics costs, partially offset by lower distributor distribution fees. Adjusted SD&A was 39.9% of net sales, a 160-basis-point increase.

Chairman and CEO Ryals McMullian said third-quarter results reflected a continued challenging operating environment driven by pressure on household budgets, evolving consumer behavior and heightened promotional activity, as well as areas where the company needs to move faster with focused execution. He said the company had expected earlier pricing actions and the relaunch of Nature’s Own with fewer, simpler ingredients to help stabilize performance. He said the company is seeing encouraging signs for Nature’s Own, including improving sequential trends and growing awareness of the relaunch, although the pace of improvement has been slower than anticipated, primarily in loaf, where category trends remain challenging.

McMullian said the company is accelerating actions already underway to strengthen customer execution, close innovation gaps, and better align the portfolio with evolving consumer preferences. He said the environment is expected to remain challenging in the near term.

Given third-quarter performance and current conditions, Flowers Foods is adjusting its 52-week fiscal 2026 outlook. The company now expects net sales of approximately $5.016 billion to $5.063 billion, a -4.6% to -3.7% change versus the prior year, compared with prior guidance of $5.070 billion to $5.142 billion. Adjusted EBITDA is now expected in a range of approximately $415 million to $430 million, compared with prior guidance of $453 million to $481 million. Adjusted diluted EPS is now expected at approximately $0.63 to $0.68 a share, compared with prior guidance of $0.75 to $0.85 a share.

The outlook assumes depreciation and amortization of approximately $165 million to $170 million, net interest expense of approximately $60 million to $65 million, an effective tax rate of approximately 27%, a weighted average diluted share count of approximately 213.5 million shares, and capital expenditures of approximately $115 million to $125 million.

Restructuring charges, impairment of assets, and recovery on inferior ingredients together totaled $5.4 million, approximately flat with $5.5 million of prior-year restructuring charges. Depreciation and amortization expenses were $38.3 million, or 3.3% of net sales.