Corporate Profiles - 2024 - 68

COMPANY overview
Flowers Foods Inc.
Making progress against
strategic initiatives
E
ven as the company grappled with disruptions
associated with its repurchase
of bakery distribution routes in California,
Flowers Foods, Inc. made progress over the
past year against several of its key strategic
initiatives - building its brands, strengthening
its management team, boosting margins and
mergers and acquisitions.
In August 2023, Flowers agreed to settle a distributor-related
class action lawsuit in California.
The settlement provided for $55 million to pay
about 475 plaintiffs and to cover legal costs and
other expenses. The total cost of the repurchases
has climbed to just over $80 million.
Flowers has said little publicly about the
repurchase process, but in February, A. Ryals
McMullian, the company's chief executive officer,
offered a sketch of what would transpire
it will be a phased-in approach. So, we have 12
months from the date of the settlement to get
that done. "
The settlements were approved March 18,
and in an August 2024 quarterly filing with the
Securities and Exchange Commission, Flowers
said it was on track toward transitioning its
California distribution model.
" We anticipate a continued shift from distributor
distribution fees to workforce-related costs
and territory-related logistics costs, among
others, as the company completes a phased
repurchase of the California distribution rights
and converts to an employee-based model in
that state, " Flowers said. " The repurchases began
at the end of the first quarter of fiscal 2024
and are anticipated to be completed by the end
of the first quarter of fiscal 2025. "
Flowers has been accelerating the rollout
Chief executive officer -
A. Ryals McMullian
once the settlement is approved. The costs were
recorded in the third quarter of 2023, but R.
Steve Kinsey, chief financial officer and chief
accounting officer, said the California transition
could be a drag on earnings in 2024.
" We will then set about converting all of the
distributors in California to an employee-based
model, " he said. " That is at least out the gate,
likely to be somewhat dilutive to our results out
in California at least in the short term until we
can get everybody trained up, etc., bring all the
employees on. The good news there is, though,
68 \ October 2024
of new products from a variety of its brands,
including protein bars, smaller-size loaves of
bread, breakfast items and more.
" The breadth and scope of our newest
launches are a testament to our continued focus
on innovation and the growth of our leading
brands, " said Mark Courtney, chief brand
officer at Flowers Foods. " Our new products
have been developed to meet the latest market
trends and preferences, offering consumers
more choice while driving additional value for
our customers and our business. "
Under the Nature's Own brand, the company
launched Keto Soft White Buns, which contain
one net carb per serving; Perfectly Crafted Flatbreads,
which are available in white and garlic
flavors and are Non-GMO Project verified;
and Small Loaves, which are 12-oz loaves of
Nature's Own bread for smaller households and
are available in ancient grain and homestyle
white.
In addition to Organic Rock'N'Rolls dinner
rolls available from Dave's Killer Bread,
Amped-Up Protein Bars were launched under
the brand. The bars contain 10 grams of protein
per bar and are available in peanut butter
chocolate chunk, double chocolate coconut
Flowers Foods, Inc.
net income
in millions
2023
$123
2022
$228
2021
$206
Source: Flowers Foods, Inc.
Flowers Foods, Inc.
net sales
in millions
2023
$5,091
2022
$4,806
2021
$4,331
Source: Flowers Foods, Inc.
Flowers Foods, Inc.
share price
Source: New York Stock Exchange
$18
$20
$22
$24
$26
Sept. Nov.
2023
FLOWERS FOODS, INC.
Jan.
2024
Sept. 4, 2024 = $23.39
HIGH =
May 15, 2024 = $25.25
LOW =
Oct. 12, 2023 = $19.73
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Corporate Profiles - 2024

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