Flowers Foods (FLO) reported first-quarter results that showed an improvement in profit but a decline in revenue. The company makes and sells packaged bakery products, including bread. It is one of the largest U.S. bakery operators with brands such as Nature’s Own and Tastykake.
Revenue of $1.3 billion decreased 3.5% year-over-year and missed the consensus estimate of $1.32 billion. Branded Retail and Store Branded Retail segments were a drag as sales fell 3.3% and 14.6%, respectively. Meanwhile, Non-Retail and Other segment sales jumped 3.6%. Net profit rose $77.4 million to $71.7 million versus a net loss of $5.7 million a year ago. That produced an adjusted EPS of $0.41 that beat the consensus estimate of $0.38.
“Flowers delivered impressive results to start 2021…Our leading brands are thriving,” said Flowers Foods CEO Ryals McMullian.
For Fiscal 2021, Flowers Foods expects to report revenue in the range of $4.23 billion – $4.30 billion. That shows a slight boost to the low-end of the range from $4.21 billion previously. The company guided full-year EPS in the range of $1.10 – $1.17. It previously estimated the low-end of the range at $1.07.
The full-year guidance assumes that interest expenses will be $10 million and that capital expenditures will range between $140 million and $150 million. Furthermore, the company assumes that its effective tax rate will be 24.5%, and the weighted average of diluted shares will be 213 million. (See Flowers Foods stock analysis on TipRanks)
On the back of the Q1 results, Jefferies analyst Robert Dickerson maintained a Hold rating with a $22 price target on Flowers Foods stock. Dickerson’s price target implies 10.93% downside potential.
“Mgmt commentary suggested manageable cost inflation likely this year, with higher potential pressure next year,” noted Dickerson.
Consensus among analysts on Wall Street is a Hold based on 2 Hold ratings. The average analyst price target of $23.50 points to 4.86% downside potential from the current price.
FLO scores a 7 out of 10 on TipRanks’ Smart Score rating system, implying the stock’s returns are likely to align with the market performance.
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