Flowers Foods, Inc.

The company did not provide a detailed top-line or EPS figure in the transcript, but management said second-quarter results did not meet expectations. Fresh packaged bread remained challenged, and the fresh bread volume decline was 9.5%, while gross margin held up better than expected despite that volume pressure. For the rest of 2026, management expects Q3 year-over-year sales to be down, followed by more stabilization in Q4 as new business wins ramp; they also said cost actions taken after Q1 should create about a $20 million tailwind exiting 2026 into 2027. Most commodities for the rest of this year are fully hedged, and the current guide was unchanged despite some pressure from oil, diesel, and resin.

Ryals McMullian said the quarter fell short because the category remains under pressure, and he framed the response as an acceleration of strategic initiatives rather than a change in direction. He highlighted innovation in smaller loaves, sourdough, and protein, better in-store execution, new business, and continued brand investment as the key levers. His tone was candid but constructive: he acknowledged work remains, while saying he remains confident in the strategy, brands, and actions being taken.

Anthony Scaglione said the back half should benefit from new business wins, reduced elasticities as prior-year pricing is lapped in Q4, and some stabilization in Nature's Own as marketing takes hold. He said most commodities for the rest of 2026 are fully hedged, with exposure mainly in oil, diesel, and indirectly resin in packaging, and that the current guide had not changed because of commodity pressure. He also pointed to roughly $20 million of cost savings tailwind exiting 2026 into 2027, while noting 2027 planning is still in process and inflation, price/mix, and pack architecture all remain open items.

Analysts focused on what drives the implied back-half improvement, and management said it comes from balanced new business wins across Away-from-Home and retail branded, plus innovation and cost savings rather than a category recovery. On pricing, management said the issue is not only price; they pointed to consumer trade-down, private label, and underpenetration in half loaves, sourdough, and protein/fiber products. They also said the Dave's Killer Bread marketing pullback was temporary and tied to this year's planned campaign cadence, and confirmed the comprehensive review is complete and now moving into execution.