Flowers Foods Inc FLO reported a fourth-quarter sales decline of 1.6% year-on-year to $1.11 billion, missing the analyst consensus estimate of $1.13 billion.

Adjusted EPS of $0.22 beat the analyst consensus estimate of $0.21.

Materials, supplies, labor, and other production costs were 51.2% of net sales, a 90-basis point decrease.

Operating income for the quarter increased 22.9% to $61.4 million and the operating margin expanded 110 basis points to 5.5%.

Adjusted EBITDA increased 6.3% to $102.4 million with the margin expanding to 9.2%. Operating cash flow for the quarter totaled $130.3 million.

“Flowers’ strong execution of our portfolio strategy and cost savings initiatives drove fourth quarter and full year 2024 adjusted EPS growth in a difficult economic environment,” said chairman and CEO Ryals McMullian.

“We expect continued strong execution as we navigate a difficult economic environment in 2025. First-half results are expected to benefit from the carryover of new business wins and savings and pricing initiatives, as well as moderating commodity costs.”

The company held $5.0 billion in cash and equivalents as of December 28, 2024.

Outlook: For FY25, Flowers expects revenue of $5.403 billion to $5.487 billion versus the estimate of $5.22 billion.

The company sees adjusted EPS of $1.11 to $1.24 against the consensus of $1.30. Capital expenditures are expected to be $140 million to $150 million.

Price Action: FLO shares are trading higher by 2.12% at $19.75 in premarket at the last check Friday.

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