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Will Project Centennial Aid Flowers Foods' (FLO) Q1 Earnings?

Zacks Equity Research

Flowers Foods, Inc. FLO is slated to release first-quarter 2019 results on May 15, after market close. This provider of packaged bakery foods reported average negative earnings surprise of 3.9% in the trailing four quarters. Let’s see what’s in store this time.

Factors Likely to Impact in Q1

Flowers Foods focuses on acquisitions to strengthen product portfolio and expand in untapped markets. The buyouts of Dave’s Killer Bread and Alpine Valley Bread are yielding results. These combined with strong brand such as Nature's Own and Wonder are expected to act as key catalyst in the upcoming quarterly announcement.

Additionally, the company is progressing well with the Project Centennial — an initiative to optimize supply chain operations, enhance efficiency as well as bolster product offerings and develop leading capacities. The project also focuses on cost reduction to boost margins. Along with these, the company is implementing prudent pricing to improve price mix and drive revenues. Such well-spun efforts are likely to remain an upside in the first quarter.

While such factors look encouraging, there are certain headwinds in Flowers Foods’ path that might affect the forthcoming quarter’s results. Most importantly, the company is witnessing a steady rise in material costs, such as supplies labor and other products. For 2019, management expects cost inflation to persist. This mars expectations for the first quarter as well. Moreover, soft volumes in the foodservice, cake and vending businesses are likely to be a drag.  

Flowers Foods, Inc. Price, Consensus and EPS Surprise

 

Flowers Foods, Inc. Price, Consensus and EPS Surprise

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

 

Which Way Are Estimates Heading?

The Zacks Consensus Estimate for first-quarter earnings is pegged at 30 cents, which is flat with earnings delivered in the year-ago quarter. The current estimate has been stable in the past 30 days.

Further, the consensus mark for revenues is pegged at $1,235 million, calling for a rise of approximately 2.4% from the year-ago quarter’s figure.

What the Zacks Model Unveils

Our proven model doesn’t show that Flowers Foods is likely to beat bottom-line estimates this quarter. For this to happen, the 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 has a Zacks Rank #3, its Earnings ESP of 0.00% makes surprise prediction difficult. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks Poised to Beat Earnings Estimates

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

Kimberly-Clark Corporation KMB has an Earnings ESP of +0.04% and a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Blue Apron Holdings APRN, a Zacks #3 Ranked company, has an Earnings ESP of +2.57%.

Monster Beverage MNST has an Earnings ESP of +0.37% and a Zacks Rank of 3.

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