Stephens reduced its price target for Flowers Foods to $6 from $8 on Monday, citing weaker-than-expected second-quarter results and ongoing industry pressures. The brokerage maintained its Equal Weight rating on the stock, which was trading at $6.95, just above its 52-week low of $6.80.
The company reported adjusted earnings per share of $0.21, missing the $0.24 estimate, while revenue came in at $1.19 billion against a $1.24 billion forecast. Total volumes fell 5.8% in the quarter, with fresh bread volumes declining 9.5%. Flowers Foods attributed the decline to heightened price sensitivity among consumers, increased competition from private-label products, and aggressive promotional activity in the category.
The Dave’s Killer Bread brand underperformed due to reduced marketing investments, price sensitivity, and competitive pressures. Traditional white bread also saw declines in both value and unit sales. Despite the weak performance, management revised guidance for the second half of 2026, projecting an acceleration in sales supported by new commercial contracts and product innovations, including half-loaves, sourdough, and protein breads.
For fiscal year 2027, Flowers Foods warned that higher ingredient costs would likely pressure margins. The stock has declined 52% over the past year, reflecting broader challenges in the fresh bread category.
