Flowers Foods (FLO) reported results for fiscal 4Q17 on February 7, 2018. The company’s adjusted EPS (earnings per share) of $0.17 and sales of $873.6 million in fiscal 4Q17 easily topped the analysts’ estimate of $0.15 and $861 million, respectively. Despite a tough operational backdrop, the company stated that the demand upsurge in Dave’s Killer Bread boosted the company’s sales performance in fiscal 4Q17.
Among other quarterly highlights, the company’s cost-cutting efforts and organizational restructuring led to a $32 million gross savings in fiscal 2017.
Following the earnings announcement on February 7 and the earnings conference call the next day, the stock had gained nearly 5.6% as of February 8, 2018. This was followed by another 2.1% gain on February 9, 2018. On a YTD (year-to-date) basis, the stock price is up 5.5%.
The YTD stock performance is much better when compared to peers. In comparison, Treehouse (THS) is down 14.8%, while J&J Snack Foods (JJSF) is down 11.8% since the start of this year. Campbell Soup (CPB) is down 4.9% on a YTD basis as of February 9, 2018. In comparison, the S&P 500 Index (SPX-Index) is down 2% as of February 9, 2018.
What analysts have to say after results
After the fiscal 4Q17 results, out of the eight analysts providing a recommendation on Flowers Foods, 50% have rated it as a “hold,” while the rest rated it as a “buy.” We have seen no target price revision activity so far. Currently, the analysts’ 12-month average target price for the company is $21.86, which reflects a 7.3% upside to the share price as of February 9, 2018.
Where do peers stand?
Out of 17 analysts covering Treehouse, ~76.0% have provided a “hold” rating while for Campbell Soup, 56% of the analysts have a “hold.” For J&J Snack Foods, 40.0% of the five analysts covering the stock have provided “hold” ratings.
In this series, we’ll discuss Flowers Foods’ fiscal 4Q17 results in detail, starting with a discussion of the company’s earnings in the next part of this series.