Flowers Foods Cuts Outlook After Earnings and Sales Miss

The owner of Nature's Own and Wonder reported third-quarter profit of $14.4 million, or 7 cents a share, compared with $39.5 million, or 19 cents a share, a year earlier. Adjusted earnings were 10 cents a share, below the 15 cents analysts polled by FactSet had expected.

Sales declined 4.7% to $1.17 billion, against analysts’ forecast of $1.18 billion. Favorable price and product mix did not make up for lower volume. Branded retail sales fell 5.1%, while other sales decreased 4%.

Chief Executive Ryals McMullian said results reflected pressure on household budgets, changing consumer behavior and increased promotional activity, as well as areas where the company needed to execute faster. Flowers Foods now expects full-year sales of $5.02 billion to $5.06 billion, down from its previous forecast of $5.07 billion to $5.14 billion. Its adjusted earnings forecast is 63 cents to 68 cents a share, compared with the earlier range of 75 cents to 85 cents.

McMullian said Flowers Foods expects challenging consumer conditions to persist in the near term. The company sees encouraging signs for Nature's Own, he said, but improvement has been slower than anticipated. Shares fell 12% to $5.30 in after-hours trading. Through Thursday’s close, the stock was down 45% year to date.