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Flowers Foods (FLO) Q4 Earnings Miss Estimates, Costs Rise
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Flowers Foods, Inc. (FLO - Free Report) delivered soft results for the fourth quarter of fiscal 2021 as both the top and the bottom line declined year over year and missed the Zacks Consensus Estimate. Both branded and store branded retail sales declined year over year and costs increased. However, management’s fiscal 2022 guidance for the top and bottom lines suggests an increase from fiscal 2021 levels.
Flowers Foods’ leading brands continue to see an increased market share and the company is committed to enhancing efficiencies through programs like its digital marketing initiative. These efforts, together with higher pricing (announced in January 2022), are expected to counter the inflationary effect witnessed in the fourth quarter. Management expects its innovation and marketing-related investments, price hikes and focus on efficiencies to lead to the top and bottom-line growth in fiscal 2022.
Q4 Highlights
Adjusted earnings per share (EPS) of 20 cents missed the Zacks Consensus Estimate of 22 cents. The bottom line declined 28.6% year over year, which can be attributed to soft sales and escalated costs.
Flowers Foods, Inc. Price, Consensus and EPS Surprise
Sales fell 3.9% to $983.5 million and missed the Zacks Consensus Estimate of $987 million. Branded retail sales dropped 4% to $649.9 million. Store branded retail sales declined 14.6% to $116.8 million. Non-retail and other sales rose 3.5% to $216.8 million.
Costs & Margins
Materials, labor, supplies and other production expenses (excluding depreciation and amortization) as a percentage of sales escalated by 110 basis points (bps) year over year to 52.1%. This was a result of reduced sales and elevated ingredient and packaging costs, somewhat negated by lower outside purchases and reduced incentive compensation costs.
Adjusted selling, distribution and administrative costs as a percentage of sales flared up 100 bps to 38.9%, which can be attributed to escalated transportation and labor costs (excluding incentive compensation), along with higher marketing investments among other factors. Adjusted EBITDA margin contracted 210 bps to 9%.
Image Source: Zacks Investment Research
More Financial Aspects
Flowers Foods ended the reported quarter with cash and cash equivalents of $185.9 million and long-term debt of $890.6 million. Stockholders’ equity amounted to $1,411.3 million.
For fiscal 2021, FLO’s cash flow from operating activities amounted to $344.6 million, while capital expenditures were $136 million.
Flowers Foods paid out dividends worth $175.9 million in the fiscal and has 5.8 million shares remaining under the ongoing repurchase program. Capital expenditures are projected in the range of $175-$185 million for fiscal 2022.
Guidance
While the operating landscape remains tough, the company’s early results for fiscal 2022 have been promising. Management expects the momentum to be maintained.
Management projects sales for fiscal 2022 in the range of nearly $4.660-$4.695 billion, suggesting a nearly 7.6-8.4% increase from the year-ago reported figure. EPS are envisioned in the range of roughly $1.25-$1.35, up from $1.24 reported in fiscal 2021.
Shares of this Zacks Rank #2 (Buy) company have risen 22% over the past six months compared with the industry’s rise of 1.2%.
Looking for Other Consumer Staple Stocks? Check These
Helen of Troy, a designer, developer, marketer, importer and distributor, carries a Zacks Rank #1 (Strong Buy) at present. Shares of Helen of Troy have dipped 15% in the past six months. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Helen of Troy’s current financial-year sales and EPS suggests growth of 0.8% and 0.6%, respectively, from the year-ago reported number. HELE has a trailing four-quarter earnings surprise of 19.1%, on average.
Inter Parfums, which manufactures, markets and distributes a range of fragrances and related products, carries a Zacks Rank #1. Shares of Inter Parfums have moved up 27.9% in the past six months.
The Zacks Consensus Estimate for Inter Parfums’ current financial-year sales and EPS suggests growth of 15.4% and 14.7%, respectively, from the year-ago reported number. IPAR has a trailing four-quarter earnings surprise of nearly 30%, on average.
Medifast, the manufacturer and distributor of weight loss, weight management, healthy living products, and other consumable health and nutritional products, currently carries a Zacks Rank #2. Shares of Medifast have dropped 20.2% in the past six months.
The Zacks Consensus Estimate for Medifast’s current financial-year sales and EPS suggests growth of about 63% and 49.3%, respectively, from the year-ago reported figure. MED has a trailing four-quarter earnings surprise of 17.3%, on average.
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Flowers Foods (FLO) Q4 Earnings Miss Estimates, Costs Rise
Flowers Foods, Inc. (FLO - Free Report) delivered soft results for the fourth quarter of fiscal 2021 as both the top and the bottom line declined year over year and missed the Zacks Consensus Estimate. Both branded and store branded retail sales declined year over year and costs increased. However, management’s fiscal 2022 guidance for the top and bottom lines suggests an increase from fiscal 2021 levels.
Flowers Foods’ leading brands continue to see an increased market share and the company is committed to enhancing efficiencies through programs like its digital marketing initiative. These efforts, together with higher pricing (announced in January 2022), are expected to counter the inflationary effect witnessed in the fourth quarter. Management expects its innovation and marketing-related investments, price hikes and focus on efficiencies to lead to the top and bottom-line growth in fiscal 2022.
Q4 Highlights
Adjusted earnings per share (EPS) of 20 cents missed the Zacks Consensus Estimate of 22 cents. The bottom line declined 28.6% year over year, which can be attributed to soft sales and escalated costs.
Flowers Foods, Inc. Price, Consensus and EPS Surprise
Flowers Foods, Inc. price-consensus-eps-surprise-chart | Flowers Foods, Inc. Quote
Sales fell 3.9% to $983.5 million and missed the Zacks Consensus Estimate of $987 million. Branded retail sales dropped 4% to $649.9 million. Store branded retail sales declined 14.6% to $116.8 million. Non-retail and other sales rose 3.5% to $216.8 million.
Costs & Margins
Materials, labor, supplies and other production expenses (excluding depreciation and amortization) as a percentage of sales escalated by 110 basis points (bps) year over year to 52.1%. This was a result of reduced sales and elevated ingredient and packaging costs, somewhat negated by lower outside purchases and reduced incentive compensation costs.
Adjusted selling, distribution and administrative costs as a percentage of sales flared up 100 bps to 38.9%, which can be attributed to escalated transportation and labor costs (excluding incentive compensation), along with higher marketing investments among other factors. Adjusted EBITDA margin contracted 210 bps to 9%.
More Financial Aspects
Flowers Foods ended the reported quarter with cash and cash equivalents of $185.9 million and long-term debt of $890.6 million. Stockholders’ equity amounted to $1,411.3 million.
For fiscal 2021, FLO’s cash flow from operating activities amounted to $344.6 million, while capital expenditures were $136 million.
Flowers Foods paid out dividends worth $175.9 million in the fiscal and has 5.8 million shares remaining under the ongoing repurchase program. Capital expenditures are projected in the range of $175-$185 million for fiscal 2022.
Guidance
While the operating landscape remains tough, the company’s early results for fiscal 2022 have been promising. Management expects the momentum to be maintained.
Management projects sales for fiscal 2022 in the range of nearly $4.660-$4.695 billion, suggesting a nearly 7.6-8.4% increase from the year-ago reported figure. EPS are envisioned in the range of roughly $1.25-$1.35, up from $1.24 reported in fiscal 2021.
Shares of this Zacks Rank #2 (Buy) company have risen 22% over the past six months compared with the industry’s rise of 1.2%.
Looking for Other Consumer Staple Stocks? Check These
Some other top-ranked stocks are Helen of Troy (HELE - Free Report) , Inter Parfums (IPAR - Free Report) and Medifast, Inc. (MED - Free Report)
Helen of Troy, a designer, developer, marketer, importer and distributor, carries a Zacks Rank #1 (Strong Buy) at present. Shares of Helen of Troy have dipped 15% in the past six months. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Helen of Troy’s current financial-year sales and EPS suggests growth of 0.8% and 0.6%, respectively, from the year-ago reported number. HELE has a trailing four-quarter earnings surprise of 19.1%, on average.
Inter Parfums, which manufactures, markets and distributes a range of fragrances and related products, carries a Zacks Rank #1. Shares of Inter Parfums have moved up 27.9% in the past six months.
The Zacks Consensus Estimate for Inter Parfums’ current financial-year sales and EPS suggests growth of 15.4% and 14.7%, respectively, from the year-ago reported number. IPAR has a trailing four-quarter earnings surprise of nearly 30%, on average.
Medifast, the manufacturer and distributor of weight loss, weight management, healthy living products, and other consumable health and nutritional products, currently carries a Zacks Rank #2. Shares of Medifast have dropped 20.2% in the past six months.
The Zacks Consensus Estimate for Medifast’s current financial-year sales and EPS suggests growth of about 63% and 49.3%, respectively, from the year-ago reported figure. MED has a trailing four-quarter earnings surprise of 17.3%, on average.