Flowers Foods, Inc. FLO is scheduled to release second-quarter 2019 results on Aug 7. The packaged bakery foods company delivered a positive earnings surprise of 6.7% in the last reported quarter, though it has a mixed surprise record in the trailing four quarters.
Let’s see what’s in store for the company this time around.
Flowers Foods, Inc. Price and EPS Surprise
Flowers Foods, Inc. price-eps-surprise | Flowers Foods, Inc. Quote
What to Expect?
The Zacks Consensus Estimate for earnings in the second quarter has been stable over the past 30 days at 26 cents, which indicates a marginal increase from 25 cents reported in the year-ago quarter. The consensus mark for revenues is $965 million, implying growth of 2.6% from the year-ago quarter’s reported figure.
Factors to Note
Flowers Foods is likely to gain from solid buyouts, especially Dave’s Killer Bread (DKB), which has been boosting its market share for a while now. Also, the acquisition of Canyon Bakehouse has helped the company extend its presence in the growing gluten-free bakery space. This is expected to drive the top line in the quarter under review.
Flowers Foods’ results are expected to reflect benefits from Project Centennial. This initiative is aimed at streamlining operations, fueling efficiencies, curtailing costs to improve margins, optimizing supply chain and making prudent investments to solidify the company’s competitive position and fuel revenue growth.
Will Hurdles be Offset?
We note that Flowers Foods has been incurring high materials, supplies, labor and other production costs for quite some time now. Apart from higher labor and commodity prices, increased purchase of outside products has been triggering a rise in expenses. Cost inflation of commodity, transport and labor may have hurt the company’s performance in the second quarter.
Also, volumes in the foodservice category are being impacted by inferior yeast. While the company is making solid endeavors to improve volumes, it remained conservative regarding volume growth for 2019 when it reported first-quarter 2019 results. So, the second quarter may not be an exception.
Nevertheless, we expect Flowers Foods’ efficient pricing strategy, focus on core initiatives and the aforementioned upsides to provide cushion to the stock from these headwinds. Markedly, price mix contributed nearly 3.2% to overall top-line growth in the first quarter and the base business is expected to continue gaining from improved price/mix.
What the Zacks Model Unveils
Our proven model doesn’t show a beat for Flowers Foods this earnings season. For this to happen, a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold). You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Though Flowers Foods carries a Zacks Rank #3, it has an Earnings ESP of 0.00%, which makes surprise prediction difficult.
Stocks Poised to Beat Earnings Estimates
Estee Lauder EL has an Earnings ESP of +2.46% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
General Mills GIS has an Earnings ESP of +0.87% and a Zacks Rank #2.
Kraft Heinz KHC has an Earnings ESP of +8.00% and a Zacks Rank #3.
The Hottest Tech Mega-Trend of All
Last year, it generated $8 billion in global revenues. By 2020, it's predicted to blast through the roof to $47 billion. Famed investor Mark Cuban says it will produce ""the world's first trillionaires,"" but that should still leave plenty of money for regular investors who make the right trades early.
See Zacks' 3 Best Stocks to Play This Trend >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The Estee Lauder Companies Inc. (EL) : Free Stock Analysis Report
General Mills, Inc. (GIS) : Free Stock Analysis Report
Flowers Foods, Inc. (FLO) : Free Stock Analysis Report
The Kraft Heinz Company (KHC) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research