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Factors Setting the Tone for Flowers Foods (FLO) Q4 Earnings

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Flowers Foods, Inc. FLO is scheduled to release fourth-quarter 2019 results on Feb 5. We note that in the trailing four quarters, this packaged bakery food company’s bottom line outperformed the Zacks Consensus Estimate by 2.4%, on average.

The Zacks Consensus Estimate for fourth-quarter 2019 earnings has been stable in the past 30 days at 17 cents per share, which suggests growth of 6.3% from the year-ago quarter’s reported figure. The consensus mark for revenues is pegged at $909.9 million, which indicates a rise of 3.3% from the prior-year quarter’s level.

The Zacks Consensus Estimate for 2019 earnings per share stands at 96 cents, suggesting a rise of 2.1% from the previous year’s reported figure. The consensus mark for revenues stands at $4.1 billion.

Flowers Foods, Inc. Price and EPS Surprise

Factors to Note

Flowers Foods has been progressing with the second phase of Project Centennial, which was originally launched in 2017. The plan is aimed at streamlining operations, fueling efficiencies, improving margins by curtailing costs, optimizing the supply chain and making prudent investments to aid revenue growth and solidify Flowers Foods’ competitive position. This initiative is likely to help the company attain greater supply-chain optimization and organizational efficiencies.

Further, we commend Flowers Foods’ focus on refreshing key brands, making use of adjacencies and enhancing supply-chain productivity to lift margins. Additionally, the company’s efficient pricing strategy bodes well. Favorable price/mix might have contributed to the company’s base business in the quarter under review. 

Apart from these, the company has been benefiting from its focus on making acquisitions to strengthen the product portfolio and expand in untapped markets. In this regard, the successful integration of Canyon Bakehouse (acquired in December 2018) has been boosting the top line. Also, Flowers Foods has been benefiting from contributions from Dave’s Killer Bread, which was taken over in 2015. In its last earnings call, management projected 2019 sales of $4.11-$4.13 billion, indicating 4-4.5% growth from the year-ago period’s reported figure. This view includes nearly a $75-$80 million contribution from Canyon’s buyout.

What the Zacks Model Unveils

Our proven model predicts an earnings beat for Flowers Foods this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Flower Foods has a Zacks Rank #3 and an Earnings ESP of +3.85%. You can see the complete list of today’s Zacks #1 Rank stocks here.

Other Stocks Poised to Beat on Earnings 

Here are some companies that you may want to consider, as our model shows that these have the right combination to post an earnings beat:

Darling Ingredients DAR has an Earnings ESP of +35.29% and a Zacks Rank #1.

General Mills (GIS - Free Report) has an Earnings ESP of +1.11% and a Zacks Rank #2. 

Campbell Soup Company CPB has an Earnings ESP of +3.34% and a Zacks Rank #2.

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