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Flowers Foods (FLO) to Post Q4 Earnings: What's in Store?

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Zacks Equity Research
·4 min read
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Flowers Foods, Inc. FLO is likely to report an improvement in the top and the bottom line, when it reports fourth-quarter 2020 numbers on Feb 11. The Zacks Consensus Estimate for revenues is pegged at nearly $998.1 million, which indicates an increase of 8.8% from the prior-year quarter’s reported figure. For 2020, the consensus mark is pegged at $4.36 billion that suggests growth of 5.8% from the year-ago period’s reported figure.

The Zacks Consensus Estimate for fourth-quarter earnings is unchanged at 24 cents per share, which suggests 33.3% increase from the year-ago quarter’s reported figure. For 2020, the Zacks Consensus Estimate for earnings is pegged at $1.27 per share, which suggests an improvement of 32.3% from the prior-year’s reported figure. Notably, this packaged bakery food company has a trailing four-quarter earnings surprise of 12.2%, on average. In the last reported quarter, the company delivered an earnings surprise of 16%.

Flowers Foods, Inc. Price and EPS Surprise

Flowers Foods, Inc. Price and EPS Surprise
Flowers Foods, Inc. Price and EPS Surprise

Flowers Foods, Inc. price-eps-surprise | Flowers Foods, Inc. Quote

Key Factors

Flowers Foods has been gaining from burgeoning demand owing to rising stay-at-home eating trend amid the coronavirus outbreak. Moreover, the company’s supply-chain initiatives, product optimization and restructuring actions have been helping it stay afloat amid this crisis. Also, strength in Nature's Own, Dave's Killer Bread and Wonder brands along with favorable price/mix have been yielding. For 2020, management projects sales of $4.35-$4.37 billion, suggesting growth of 5.5-6% year over year. Further, adjusted earnings per share are expected to be$1.23-$1.28, indicating growth of 28.1-33.3%.

We note that the company is progressing well with Project Centennial that is aimed at streamlining operations, fueling efficiencies, improving margins by curtailing costs, optimizing the supply chain and making prudent investments. Management is also on track with its core priorities that include developing its team, concentrating on brands, prioritizing margins and looking out for prudent buyouts.

However, Flowers Foods’ foodservice performance is under pressure due to social-distancing trends. To this end, the company is witnessing declines in most categories of its non-retail business, mainly food service, schools and other institutions. Apart from this, it has been struggling with higher adjusted selling, distribution and administrative expenses (as a percentage of sales) as well as increased start up costs for a while now. These are likely to have had an impact on the company’s fourth-quarter performance.

What the Zacks Model Unveils

Our proven model doesn’t predict an earnings beat for Flowers Foods this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Flowers Foods carries a Zacks Rank #4 (Sell) and an Earnings ESP of 0.00%.

Stocks With Favorable Combinations

Here are some companies that you may want to consider as our model shows that these have the right combination of elements to post an earnings beat.

e.l.f. Beauty Inc. ELF currently has an Earnings ESP of +21.15% and a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Newell Brands Inc. NWL currently has an Earnings ESP of +1.30% and carries a Zacks Rank #3.

Tyson Foods, Inc. TSN currently has an Earnings ESP of +0.16% and carries a Zacks Rank #3.

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