Flowers Foods Inc. reported a 4% year-over-year decline in net sales for the second quarter of fiscal 2026, totaling $1.19 billion, as volume declines of 5.8% outpaced price and mix gains of 1.8%. The Thomasville, Georgia-based bakery operator’s adjusted diluted earnings per share fell to $0.21, missing the consensus estimate of $0.24 by 12.5%, while net income decreased to $40.7 million from $58.4 million in the prior-year period.
Adjusted EBITDA declined 19.2% to $111.3 million, with the adjusted EBITDA margin contracting 180 basis points to 9.3% of sales. The company’s stock fell 4.23% in pre-market trading to $6.80, nearing the lower end of its 52-week range. Dividend yield stood at 7.04% based on current market data.
Segment performance showed broad-based softness. Branded retail net sales decreased 3.8% on volume declines of 7.6%, despite price/mix gains of 3.8%. The Other segment’s net sales fell 4.4%, with volumes down 3.4% and price/mix down 1.0%. Total company volume has declined sequentially, with a 5.8% drop in Q2 2026 following a 3.3% decline in Q1 2026 and a 2.2% decrease in Q4 fiscal 2025.
Market share trends reflected competitive pressure. Flowers Foods’ bread dollar share declined to 15.5% in Q2 2026 from 16.5% a year earlier, while store brand dollar share rose to 26.2% from 23.0% in fiscal 2021. Cake dollar share improved slightly to 6.8% from 6.6%. The company maintained leadership in the organic bread category at 72.5%, with gluten-free category share reaching 38.6%.
Cash flow for the year-to-date period totaled $241.5 million from operations, with capital expenditures of $44.5 million and dividend payments of $81.0 million. For fiscal 2026, Flowers Foods reaffirmed guidance for net sales of $5.07 billion to $5.14 billion, adjusted EBITDA of $453 million to $481 million, and adjusted diluted EPS of $0.75 to $0.85, down from $1.09 in fiscal 2025. The company expects productivity gains of approximately $20 million in the back half of the year.
Long-term growth targets remain under pressure. Net sales CAGR has moderated from 6.4% in fiscal 2020 to 4.1% in fiscal 2025, with a long-term target of 1–2%. Adjusted EBITDA growth slowed from 23.4% in fiscal 2020 to 4.0% in fiscal 2025, below the 4–6% target range. Adjusted diluted EPS growth decelerated from 36.5% in fiscal 2020 to 2.1% in fiscal 2025, falling short of the 7–9% long-term objective.
