Flowers Foods 2025 Q2 Earnings Earnings Decline Despite Slight Revenue Growth

Flowers Foods reported mixed results for fiscal Q2 2025, with modest revenue growth but a decline in earnings. The company did not meet expectations in key profitability metrics and reduced EPS guidance due to ongoing pressures in its core markets.

Revenue

Flowers Foods achieved a 1.5% year-over-year increase in total revenue, reaching $1.24 billion for the second quarter of 2025, compared to $1.22 billion in the same period of 2024. The Branded Retail segment contributed the most, generating $826.73 million, while the Other segment added $416.11 million to the total. The performance reflects steady demand for branded retail products, though challenges persist in broader market segments.

Earnings/Net Income

Flowers Foods reported a decline in earnings for Q2 2025, with EPS falling 12.5% to $0.28 from $0.32 in the prior year. Similarly, net income dropped to $58.37 million, a 12.8% decrease from $66.97 million in Q2 2024. The decline highlights ongoing cost pressures and competitive challenges that have impacted profitability.

Price Action

The stock price of Flowers Foods fell 0.82% during the latest trading day and 4.04% over the most recent full trading week. However, it edged up 0.71% month-to-date, indicating mixed investor sentiment in the near term.

Post-Earnings Price Action Review

A strategy of buying Flowers Foods shares following a revenue increase quarter-over-quarter and holding for 30 days performed poorly. The approach generated a negative compound annual growth rate (CAGR) of -17.73%, an excess return of -90.53%, and a Sharpe ratio of -0.83, reflecting high risk and significant underperformance relative to a benchmark. The maximum drawdown was 0.00%, indicating a lack of recovery in the tested time frame.

CEO Commentary

A. Ryals McMullian, CEO & Chairman, noted that Flowers Foods is undergoing a strategic shift in the baking category, driven by evolving consumer preferences and economic conditions. He emphasized progress in developing better-for-you products, including the 37% growth in keto offerings and the continued success of Dave's Killer Bread. Challenges remain in the form of competitive pressures and softness in traditional segments, but McMullian expressed confidence in the company’s innovation pipeline and long-term strategy.

Guidance

Flowers Foods has reduced its EPS guidance for the remainder of the year due to ongoing operational pressures, though no specific quantitative targets were provided. The company anticipates a decline in tariffs, improved performance in the food service segment, and continued growth in premium and better-for-you products. Capital allocation will remain balanced, with decisions based on performance, liquidity, and strategic priorities.

Additional News

On July 25, 2025, at least 14 villagers and a mobile police officer were killed in two separate attacks in the Bokkos Local Government Area of Plateau State, Nigeria. The first attack occurred around 4:00 pm, targeting villagers returning from Bokkos Market to Mangor Village. The victims, primarily from the Chirang community, were ambushed and killed by suspected terrorists, with three others injured. A second attack occurred earlier in the day, resulting in the death of a mobile police officer at his checkpoint. The situation was described as an "emergency" by local officials, and security forces have taken over the area to manage the crisis. Residents have called on the federal government to establish state police forces to address the rising violence.