Flowers Foods (NYSE: FLO) reported a 4% year-over-year decline in net sales to $1.193 billion for the second quarter of 2026, as total company volume fell 5.8% amid ongoing category pressure. The company’s adjusted diluted earnings per share of $0.21 missed the $0.24 consensus estimate, while net income decreased by $17.7 million to $40.7 million.
Adjusted EBITDA declined 19.2% to $111.3 million, with the margin contracting to 9.3% from 11.1% in the prior-year period. Branded Retail net sales decreased 3.8%, while the Other segment fell 4.4%. Fresh packaged bread unit sales dropped 9.5% year-over-year. The company’s stock fell 4.23% in pre-market trading to $6.80, near the low end of its 52-week range of $6.80 to $15.98.
Volume declines were partially offset by a 1.8% favorable price/mix improvement across the business. Branded Retail volume fell 7.6%, while the Other segment’s volume declined 3.4% with an unfavorable price/mix of 1.0%. The company’s market share in the bread category decreased from 16.8% in Q3 2024 to 15.5% in Q2 2026, though cake market share improved from 6.1% to 6.8% over the same period.
Flowers Foods maintains approximately 72.5% of the organic fresh packaged bread market, with Flowers Organics sales totaling $977.9 million in the 52 weeks ended July 19, 2026. The company’s gluten-free segment market share rose from 32.3% in fiscal 2021 to 38.6%, with gluten-free sales reaching $155.8 million. Strategic initiatives include the relaunch of Nature’s Own with fewer ingredients and Non-GMO Project Verification, alongside a marketing campaign featuring John Cena as "The Breaducator."
Fiscal 2026 guidance remains unchanged, with net sales projected between $5.070 billion and $5.142 billion, adjusted EBITDA of $453 million to $481 million, and adjusted diluted EPS of $0.75 to $0.85. Capital expenditures are guided at $115 million to $125 million, including $4 million to $8 million for an ERP system upgrade. The company also reaffirmed its long-term targets of 1–2% net sales growth, 4–6% adjusted EBITDA growth, and 7–9% adjusted diluted EPS growth.
Year-to-date through Q2 2026, cash from operations totaled $241.5 million, while dividends paid amounted to $81.0 million. Capital expenditures invested reached $44.5 million, and the dividend yield stands at 7.04%, marking 12 consecutive years of dividend increases.
