How Has Flowers Foods Stock Performed in 2018?



Stock is up 5.6%

As of July 30, Flowers Foods (FLO) stock had risen 5.6% to $20.39 on a YTD (year-to-date) basis.

In comparison, TreeHouse Foods (THS) has fallen 3.6%, while the Campbell Soup Company (CPB) has fallen 14.9% YTD. J&J Snack Foods (JJSF) has risen 1.2% on a YTD basis as of July 30. In comparison, the S&P 500 Index has risen 4.8% YTD.

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What lies ahead?

Flowers Foods is scheduled to report its second-quarter results on August 8. The stock’s price movements could see a boost, as analysts’ projections are positive. Flowers Foods is expected to witness sales growth of 1.0% to $933.1 million and adjusted EPS growth of 16.7% to $0.28 in the quarter. Dave’s Killer Bread continues to witness robust demand and is expected to drive sales. Its EPS will likely be cushioned by a lower tax rate and cost-cutting measures.

Flowers Foods is focusing on innovation, acquisitions, the improvement of its share in underpenetrated markets, and its underperforming snack business. The company is enhancing its presence in the dinner roll and breakfast segments, where the Dave’s Killer Bread and Nature’s Own brands are performing well.

Nonetheless, the company has cautioned that it’s likely to face $40 million worth of increases in commodity costs in 2018 due to cost inflation. To combat this inflation, the company is streamlining its supply chain and right-sizing its operations under Project Centennial. Apart from these innovations, the company will be reinvesting part of its savings in the promotion of its brands to drive sales.

For 2018, FLO’s management expects its sales to be in the range of ~$3.92 billion–$3.98 billion, which represents growth of 0.0%–1.6% on a YoY (year-over-year) basis. Its adjusted EPS are expected to be in the range of $1.04–$1.16, reflecting a rise of 16.9%–30.3% on a YoY basis.


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