Flowers Foods, Inc. announced its financial results for the fourth quarter and full year of fiscal 2025, concluding on January 3, 2026. The company reported a significant increase in net sales, which rose by 11.0% to reach $1.233 billion in the fourth quarter. This growth was primarily driven by an additional week of operations, the acquisition of Simple Mills, and a higher pricing mix, which offset declines in volume.
Despite the sales growth, Flowers Foods experienced a net loss of $67.1 million, a decrease of $110.2 million compared to the same quarter last year. This loss was largely attributed to a $136.0 million non-cash impairment of intangible assets. Adjusted net income fell by 1.5% to $45.8 million, while adjusted EBITDA increased by 14.7% to $117.4 million, representing 9.5% of net sales.
In the fiscal year 2025, Flowers Foods reported net sales of $5.256 billion, reflecting a 3.0% increase from the previous year. However, net income decreased by 66.2% to $83.8 million, equating to 1.6% of sales. Adjusted net income dropped 14.7% to $231.6 million. The company also reported a diluted earnings per share (EPS) of $0.40, down from $1.17 the previous year.
Operational Insights and Future Outlook
Chairman and CEO Ryals McMullian expressed optimism about the company’s performance, emphasizing the strength of its leading brands. “Flowers concluded 2025 on a positive note driven by the strong performance of our leading brands,” he stated. McMullian noted that the company’s efficiency initiatives contributed to results at the high end of its guidance range.
Looking ahead to 2026, McMullian acknowledged that the company anticipates challenges due to ongoing category headwinds and one fewer week of operations. The company is undertaking a comprehensive operational review, including its brand portfolio and supply chain strategies. McMullian remains confident that these efforts will enhance long-term value for shareholders and improve category performance.
For fiscal year 2026, Flowers Foods projects net sales to range from $5.163 billion to $5.267 billion, representing a slight decrease of -1.8% to 0.2% compared to fiscal 2025. The adjusted EBITDA is expected to be between $465 million and $495 million, with adjusted diluted EPS anticipated to fall between $0.80 and $0.90.
The company’s financial outlook is based on several assumptions, including an effective tax rate of approximately 26% and a weighted average diluted share count of around 213.5 million shares.
Financial Performance Details
In the fourth quarter, branded retail net sales surged by 16.6% to $811.6 million. This increase was attributed to the additional week of sales and contributions from the Simple Mills acquisition, despite a 2.2% decline in volume. Other net sales rose by 1.6% to $421.3 million, benefiting from the extra week but hindered by unfavorable price/mix dynamics.
Operating costs in the fourth quarter were also notable, with materials, supplies, labor, and other production costs accounting for 51.5% of net sales, an increase of 30 basis points. This rise was attributed mainly to higher outside purchases, although there were some offsets from reduced workforce-related costs.
Despite the challenges, Flowers Foods reported a healthy cash flow from operations, increasing by $33.5 million to $446.2 million for the fiscal year. Capital expenditures decreased to $127.1 million, while dividends paid to shareholders rose to $209.3 million.
The results highlight both the growth opportunities and challenges facing Flowers Foods as it navigates a competitive marketplace while working to enhance operational efficiency and financial performance. The company’s commitment to reviewing its operational strategies will be vital as it aims to sustain its growth trajectory in the coming year.