Flowers Foods (FLO) AI Stock Analysis

• Market Cap: $3.65B
• Dividend Yield: 5.54%
• Average Volume (3M): 2.20M
• Price to Earnings (P/E): 16.1
• Beta (1Y): -0.09
• Revenue Growth: -1.02%
• EPS Growth: 81.53%
• Country: US
• Employees: 10,200
• Sector: Consumer Defensive
• Sector Strength: 71
• Industry: Packaged Foods
• EPS (TTM): 0.35
• Shares Outstanding: 211,129,790
• 10 Day Avg. Volume: 2,875,919
• 30 Day Avg. Volume: 2,203,658
• PEG Ratio: 6.16
• Price to Book (P/B): 2.83
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 20.74
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $16.00
• Price Target Upside: -7.57% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 1

Flowers Foods faces financial challenges with declining revenue and profitability, but its reasonable valuation and attractive dividend yield provide some strengths. The technical analysis shows a lack of momentum, while strategic initiatives highlighted in the earnings call and a recent acquisition support future growth potential. Overall, the stock is moderately positioned, with significant risks balanced by strategic opportunities.

Positive Factors

Brand Strategy

Management's approach in creating smaller loaves to help consumers stay within budget and expanding the DKB brand into new formats is appreciated.

Margins

Adjusted gross margins expanded driven by improved input costs and optimization of the non-retail business.

Market Position

The company is well positioned with its portfolio of healthier brands for the continued decline of the white bread segment.

Negative Factors

Competitive Pressure

The likelihood exists that competitors start to step up their own activities, leading to incremental brand support needs for FLO.

Sales Growth

It is tough to get excited about another year of tepid sales growth.

White Bread Segment

White bread remains a large part of the overall business, and at least low single-digit top line growth is necessary to gain investor attention.

Flowers Foods Business Overview & Revenue Model

Company Description

Flowers Foods, Inc. produces and markets packaged bakery products in the United States. It offers fresh breads, buns, rolls, snack cakes, and tortillas, as well as frozen breads and rolls under the Nature's Own, Dave's Killer Bread, Wonder, Canyon Bakehouse, Mrs. Freshley's, and Tastykake brand names. The company distributes its products through a direct-store-delivery distribution and a warehouse delivery system, as well as operates 46 bakeries comprising 44 owned and two leased. Its customers include mass merchandisers, supermarkets and other retailers, convenience stores, national and regional restaurants, quick-serve chains, retail in-store bakeries, foodservice distributors, food wholesalers, institutions, dollar stores, and vending companies. The company was formerly known as Flowers Industries and changed its name to Flowers Foods, Inc. in 2001. Flowers Foods, Inc. was founded in 1919 and is headquartered in Thomasville, Georgia.

How the Company Makes Money

Flowers Foods generates revenue primarily through the sale of its bakery products to retail and foodservice customers. Its revenue model relies on a diversified portfolio of bakery goods that cater to different consumer preferences and dietary needs. Key revenue streams include sales from branded products, which often command premium pricing, and private label products that cater to cost-conscious consumers. The company's direct store delivery system and partnerships with independent distributors help optimize distribution efficiency and reach a broad customer base. Additionally, Flowers Foods leverages significant economies of scale and invests in brand marketing to maintain its competitive edge and drive sales growth.

Flowers Foods Financial Statement Overview

Summary

Flowers Foods is facing financial challenges with a recent decline in revenue and profitability, as well as increased leverage. While the company has shown historical strengths such as stable gross profit margins and positive cash flows, the latest results highlight potential risks in profitability and liquidity that need to be addressed to ensure sustainable growth.

Income Statement

Flowers Foods has experienced inconsistent revenue growth, with a decline in the most recent year. Gross profit margins have been strong historically, but the recent EBIT and EBITDA margins are concerning with negative EBIT reported in the latest year. Net profit margin was also impacted, showing no net income for the latest period.

Balance Sheet

The company's balance sheet shows moderate leverage with a debt-to-equity ratio that has been increasing, indicating rising debt levels. However, the equity ratio remains stable, suggesting a reasonable balance between debt and equity financing. ROE has shown strength in previous periods but is currently challenged by a lack of net income.

Cash Flow

Cash flow from operations has been historically positive, but there is a sharp decline in free cash flow in the most recent period, indicating potential cash management issues. The lack of operating cash flow and free cash flow in the latest year further impacts the company's ability to support operations and growth without external financing.

Breakdown
Dec 2024	Dec 2023	Dec 2022	Mar 2022	Mar 2021
Income Statement		Total Revenue
5.10B	5.09B	4.81B	4.33B	4.39B
	Gross Profit
2.53B	2.46B	2.30B	2.16B	2.19B
	EBIT
348.29M	172.87M	303.21M	294.92M	321.49M
	EBITDA
525.28M	345.80M	469.96M	438.99M	380.74M
	Net Income Common Stockholders
248.12M	123.42M	228.39M	206.19M	152.32M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
5.00M	22.53M	165.13M	185.87M	307.48M
	Total Assets
3.40B	3.43B	3.31B	3.25B	3.32B
	Total Debt
1.60B	1.35B	1.17B	1.19B	1.31B
	Net Debt
1.59B	1.33B	1.01B	1.01B	998.39M
	Total Liabilities
1.99B	2.08B	1.87B	1.84B	1.95B
	Stockholders Equity
1.41B	1.35B	1.44B	1.41B	1.37B
Cash Flow		Free Cash Flow
280.58M	220.28M	191.82M	198.45M	356.54M
	Operating Cash Flow
412.66M	349.35M	360.89M	344.61M	454.46M
	Investing Cash Flow
-172.67M	-403.81M	-151.09M	-191.44M	-73.99M
	Financing Cash Flow
-257.52M	-88.15M	-222.17M	-274.78M	-84.04M

Flowers Foods Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 17.31
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For FLO, the sentiment is Negative. The current price of 17.31 is below the 20-day moving average (MA) of 17.58, below the 50-day MA of 18.17, and below the 200-day MA of 20.35, indicating a bearish trend. The MACD of -0.30 indicates Positive momentum. The RSI at 43.86 is Neutral, neither overbought nor oversold. The STOCH value of 35.89 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for FLO.

Flowers Foods Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SMPL	80 Outperform	$3.70B	25.51	8.40%	―	11.47%	2.59%
LANC	72 Outperform	$4.67B	27.54	17.73%	2.18%	0.69%	27.48%
NOMD	66 Neutral	$2.78B	11.97	8.59%	3.42%	-0.24%	26.74%
Sector *	64 Neutral	$8.77B	14.68	4.78%	173.90%	3.25%	2.18%
FLO	58 Neutral	$3.65B	16.10	16.34%	5.54%	-1.02%	81.53%
JJSF	58 Neutral	$2.27B	29.93	8.20%	2.64%	0.49%	-12.32%
THS	54 Neutral	$1.18B	180.14	0.43%	―	-3.37%	-65.26%

Flowers Foods Corporate Events

Flowers Foods Acquires Purposeful Foods for $795 Million

On February 14, 2025, C. Martin Wood III announced his decision to retire from the board of directors of Flowers Foods at the end of his current term, coinciding with the company’s 2025 annual meeting of shareholders. This decision will result in a reduction of the board’s size from 12 to 11 members. Additionally, on February 21, 2025, Flowers Foods completed the acquisition of Purposeful Foods Holdings, Inc., the parent company of Simple Mills, for $795 million. This acquisition aims to enhance Flowers Foods’ presence in the better-for-you and snacking segments, diversifying its category exposure and improving growth and margin prospects.