Corporate Profiles - 2023 - 72

COMPANY overview
Flowers Foods, Inc.
In difficult environment, moving ahead
on change initiatives
A
gainst the backdrop of a challenging environment
in the baking industry, Flowers
Foods, Inc. in the past year took numerous
steps to energize its business, including the
introduction of new products, the acquisition of
a specialty baking business and the injection of
new talent into its leadership ranks.
Flowers' hopes for earnings growth in fiscal
2023 were dealt a blow early in the year when
the company conceded that strength in private
label bread sales was lasting longer than anticipated.
Sales
volume fell sharply in the first quarter
at Flowers prompting the company to trim its
financial guidance for the year. At the time, A.
Ryals McMullian, chairman and chief executive
compared with $1.27 in 2022. With the revision,
the company is projecting lower earnings
in 2023 than 2022. In 2021, adjusted EPS was
$1.24.
Sales guidance for 2023 also was revised
downward to a range of $5.09 billion to $5.14
billion, versus the previous guidance of $5.18
billion to $5.24 billion.
Investors responded to the news with disappointment,
sending Flowers shares down as
much as 13% in trading May 19, to a low for
the day of $25.10.
After the second quarter, Mr. McMullian struck
a more upbeat tone, suggesting that the tide had
turned and that consumers were " reverting toward
prior purchasing behavior. " Flowers raised
its EPS guidance to $1.18 to $1.25, versus previous
guidance of $1.15 to $1.25. Sales guidance
was raised as well.
The financial update prompted a brief rebound
in the company's shares above $26, but
the slide resumed afterward with Flowers' stock
price falling as low as $22.47 in early September,
down 25% from the 52-week high.
Innovation has been identified as a pillar of
Flowers' growth strategy, and the company in
April launched new products under several of
its brands.
Chief executive officer -
A. Ryals McMullian
officer, said private label baked foods continued
to gain market share during the quarter but expressed
confidence that the trading down trend
would pass.
" We believe that the premiumization of the
category will remain a long-term trend and that
when consumers get relief from the current inflationary
pressures, they will return to our No.
1 brands and differentiated products, " Mr. McMullian
said in May.
With the first-quarter results, Flowers lowered
its forecast for adjusted 2023 earnings
per share to $1.15 to $1.25, down 5¢ on both
sides from guidance issued in February and
72 \ October 2023
Looking to appeal to customers seeking lowcarbohydrate
options, Flowers said its Nature's
Own Keto Net One Loaf " blends the perfect
balance of softness and texture with one net
carb per slice. " The company said the variety
will meet the needs of households " with a ketofriendly
focus, " allowing them to enjoy bread
while keeping carbohydrate intake in check.
Tapping into the sustained popularity of
so-called Hawaiian bread varieties, Flowers
launched Wonder Hawaiian Buns, available in
a 15-oz package of 8 buns.
" Consumers are looking for options in the
bun category with a sweeter flavor profile, " John
Steed, senior vice president of legacy brands
at Flowers, said at the time. He described the
buns as " sweet, yet savory, " adding that the bun
features " classic Wonder soft texture that is still
Source: Flowers Foods, Inc.
Flowers Foods, Inc.
net income
in millions
2022
$228
2021
$206
2020
$152
Source: Flowers Foods, Inc.
Flowers Foods, Inc.
net sales
in millions
2022
$4,806
2021
$4,331
2020
$4,388
Flowers Foods, Inc.
share price
Source: New York Stock Exchange
$22
$24
$26
$28
$30
Sept. Nov.
2022
FLOWERS FOODS, INC.
Jan.
2023
Sept. 15, 2023 = $22.90
HIGH =
Dec. 5, 2022 = $29.33
LOW =
Sept. 6, 2023 = $22.56
March May
July
Sept.
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Corporate Profiles - 2023

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