Flowers Foods (FLO) Q1 2026 Earnings Transcript

Flowers Foods reaffirmed its full-year outlook on May 22, 2026, despite higher input-cost pressures and a challenged sales environment. Management stated it is virtually fully hedged for the balance of the year on core commodities, though diesel and transportation costs remain unhedged. A recent dividend reset freed about $100 million in cash for deleveraging, targeting leverage below 3x by fiscal 2027 while preserving brand investments. The company completed a nationwide relaunch of Nature's Own, featuring reformulated, non-GMO labeling and intensified 360-degree marketing to stabilize loaf volumes, which constitute about 38% of branded retail. Capex guidance remains $115-125 million, including roughly $2 million per bakery for maintenance. Guidance assumes easier volume comparisons as the year progresses and relies on continued cost management to offset non-hedged inputs. The company expects incremental improvements in the foodservice segment, which has shown stronger topline trends and higher profitability after prior restructuring. Management also warned of an oil-linked cost headwind in the second half of about $0.02 to $0.03 per share, while packaging costs rose with higher oil prices.