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Flowers Foods, Inc.’s (FLO - Free Report) reported second-quarter fiscal 2022 results, with the bottom line beating the Zacks Consensus Estimate but declining year over year. The top line increased on the back of growth in Branded retail, Store branded retail and Non-retail and other sales. Quarterly sales benefited from strength in the company’s leading brands.
Management highlighted that its impressive pricing and portfolio strategies and enhanced efficiencies helped it to mitigate various inflationary and supply chain pressures to generate better-than-anticipated margins. Considering this solid performance, it is raising the lower end of its fiscal 2022 earnings guidance. The company reiterated its full-year sales view.
Flowers Foods, Inc. Price, Consensus and EPS Surprise
Adjusted earnings per share (EPS) of 31 cents surpassed the Zacks Consensus Estimate of 27 cents. However, the bottom line declined from 32 cents reported in the year-ago quarter.
Sales increased 11% year over year to $1,129.1 million. Pricing/mix remained favorable by 14.4%, while volume fell by 3.4%. The Zacks Consensus Estimate for second-quarter sales was pegged at $1,133.3 million.
Branded retail sales grew 9.1% to $735.9 million, mainly on improved prices undertaken to counter inflationary pressures. These were somewhat offset by sales mix reversion and volume declines.
Store branded retail sales increased 20% to $157.2 million on favorable prices. Volumes were in line with the year-ago quarter, as gains from sales mix shifts were mitigated by targeted sales rationalization and packaging shortages.
Non-retail and other sales jumped 11.4% to $235.9 million, mainly driven by increased pricing. This was somewhat offset by soft volumes for fast food and co-manufactured products.
Costs & Margins
Materials, supplies, labor and other production costs (excluding depreciation and amortization) escalated by 240 basis points (bps) to 51.9%. This resulted from increased ingredient and packaging expenses, somewhat negated by higher sales and timing differences in the sell-through of product inventories.
Selling, distribution and administrative (SD&A) expenses came in at 38.8% of sales, down 130 bps, courtesy of price increases, reduced labor and marketing expenses and lower distributor distribution fees. These factors were somewhat offset by a rise in logistics expenses.
Adjusted EBITDA fell 1.8% to $120 million. Adjusted EBITDA margin was 10.6%, which contracted 140 bps.
Image Source: Zacks Investment Research
More Financial Aspects
Flowers Foods ended the reported quarter with cash and cash equivalents of $162.5 million and long-term debt of $891.2 million. Stockholders’ equity amounted to $1,447.5 million.
For the 28-week period ended Jul 16, 2022, FLO’s cash flow from operating activities amounted to $183.8 million, while capital expenditures were $97.9 million. Flowers Foods paid dividends worth $93.4 million during this period.
During the second quarter of fiscal 2022, the company increased its share repurchase authorization by 20 million shares. Year-to-date, it repurchased $16.5 million shares. The company has 25.1 million shares remaining under its repurchase plan.
Capital expenditures are projected in the range of $150-$160 million for fiscal 2022.
Guidance
For fiscal 2022, adjusted EPS is envisioned in the range of $1.25-$1.30. Management earlier expected adjusted EPS between $1.20 and $1.30.
For fiscal 2022, the company still expects sales in the range of $4.764-$4.850 billion, reflecting an increase of 10-12% year over year.
Shares of this Zacks Rank #2 (Buy) company have increased 13.3% in the past year compared with the industry’s 0.2% growth.
Chef’s Warehouse, a distributor of specialty food products in the United States, currently flaunts a Zacks Rank #1 (Strong Buy). CHEF has a trailing four-quarter earnings surprise of 355.9%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Chef Warehouse’s current financial-year sales suggests growth of 40.7%from the year-ago reported numbers.
United Natural Foods distributes natural, organic, specialty, produce and conventional grocery and non-food products. UNFI currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for UNFI’s current financial year sales suggests 7.6% growth from the year-ago period’s reported figures. United Natural Foods has a trailing four-quarter earnings surprise of 29.9%, on average.
General Mills, which manufactures and markets branded consumer foods worldwide, currently carries a Zacks Rank of 2. GIS has a trailing four-quarter earnings surprise of 6.5%, on average.
The Zacks Consensus Estimate for General Mills’ current financial year sales and EPS suggests growth of almost 2% and 1.5%, respectively, from the corresponding year-ago reported figures.
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Flowers Foods (FLO) Q2 Earnings Beat Estimates, Sales Rise Y/Y
Flowers Foods, Inc.’s (FLO - Free Report) reported second-quarter fiscal 2022 results, with the bottom line beating the Zacks Consensus Estimate but declining year over year. The top line increased on the back of growth in Branded retail, Store branded retail and Non-retail and other sales. Quarterly sales benefited from strength in the company’s leading brands.
Management highlighted that its impressive pricing and portfolio strategies and enhanced efficiencies helped it to mitigate various inflationary and supply chain pressures to generate better-than-anticipated margins. Considering this solid performance, it is raising the lower end of its fiscal 2022 earnings guidance. The company reiterated its full-year sales view.
Flowers Foods, Inc. Price, Consensus and EPS Surprise
Flowers Foods, Inc. price-consensus-eps-surprise-chart | Flowers Foods, Inc. Quote
Q2 Highlights
Adjusted earnings per share (EPS) of 31 cents surpassed the Zacks Consensus Estimate of 27 cents. However, the bottom line declined from 32 cents reported in the year-ago quarter.
Sales increased 11% year over year to $1,129.1 million. Pricing/mix remained favorable by 14.4%, while volume fell by 3.4%. The Zacks Consensus Estimate for second-quarter sales was pegged at $1,133.3 million.
Branded retail sales grew 9.1% to $735.9 million, mainly on improved prices undertaken to counter inflationary pressures. These were somewhat offset by sales mix reversion and volume declines.
Store branded retail sales increased 20% to $157.2 million on favorable prices. Volumes were in line with the year-ago quarter, as gains from sales mix shifts were mitigated by targeted sales rationalization and packaging shortages.
Non-retail and other sales jumped 11.4% to $235.9 million, mainly driven by increased pricing. This was somewhat offset by soft volumes for fast food and co-manufactured products.
Costs & Margins
Materials, supplies, labor and other production costs (excluding depreciation and amortization) escalated by 240 basis points (bps) to 51.9%. This resulted from increased ingredient and packaging expenses, somewhat negated by higher sales and timing differences in the sell-through of product inventories.
Selling, distribution and administrative (SD&A) expenses came in at 38.8% of sales, down 130 bps, courtesy of price increases, reduced labor and marketing expenses and lower distributor distribution fees. These factors were somewhat offset by a rise in logistics expenses.
Adjusted EBITDA fell 1.8% to $120 million. Adjusted EBITDA margin was 10.6%, which contracted 140 bps.
Image Source: Zacks Investment Research
More Financial Aspects
Flowers Foods ended the reported quarter with cash and cash equivalents of $162.5 million and long-term debt of $891.2 million. Stockholders’ equity amounted to $1,447.5 million.
For the 28-week period ended Jul 16, 2022, FLO’s cash flow from operating activities amounted to $183.8 million, while capital expenditures were $97.9 million. Flowers Foods paid dividends worth $93.4 million during this period.
During the second quarter of fiscal 2022, the company increased its share repurchase authorization by 20 million shares. Year-to-date, it repurchased $16.5 million shares. The company has 25.1 million shares remaining under its repurchase plan.
Capital expenditures are projected in the range of $150-$160 million for fiscal 2022.
Guidance
For fiscal 2022, adjusted EPS is envisioned in the range of $1.25-$1.30. Management earlier expected adjusted EPS between $1.20 and $1.30.
For fiscal 2022, the company still expects sales in the range of $4.764-$4.850 billion, reflecting an increase of 10-12% year over year.
Shares of this Zacks Rank #2 (Buy) company have increased 13.3% in the past year compared with the industry’s 0.2% growth.
Other Solid Food Bets
Some other top-ranked stocks are The Chef's Warehouse (CHEF - Free Report) , General Mills, Inc. (GIS - Free Report) and United Natural Foods (UNFI - Free Report) .
Chef’s Warehouse, a distributor of specialty food products in the United States, currently flaunts a Zacks Rank #1 (Strong Buy). CHEF has a trailing four-quarter earnings surprise of 355.9%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Chef Warehouse’s current financial-year sales suggests growth of 40.7%from the year-ago reported numbers.
United Natural Foods distributes natural, organic, specialty, produce and conventional grocery and non-food products. UNFI currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for UNFI’s current financial year sales suggests 7.6% growth from the year-ago period’s reported figures. United Natural Foods has a trailing four-quarter earnings surprise of 29.9%, on average.
General Mills, which manufactures and markets branded consumer foods worldwide, currently carries a Zacks Rank of 2. GIS has a trailing four-quarter earnings surprise of 6.5%, on average.
The Zacks Consensus Estimate for General Mills’ current financial year sales and EPS suggests growth of almost 2% and 1.5%, respectively, from the corresponding year-ago reported figures.