Flowers Foods Down in Q1 Amid Bread Category Pressures

After its $795 million purchase of Simple Mills in January, Flowers Foods, Inc. reported a net sales dip in its Q1 2025 earnings report today as poor price/mix and negative volume sales offset the gains from the acquisition.

Net sales were down 1.4% to $1.5 billion – of which $24.3 million came from Simple Mills – and net income fell 27.4% in the quarter to $53 million.

“Despite economic uncertainty and greater-than-expected category declines in the first quarter, Flowers’ performance underscores the importance of our leading brands, each of which maintained or gained unit and dollar share,” said Ryals McMullian, chairman and CEO of Flowers Foods, in a statement.

“To mitigate category weakness, we are continuing to invest in on-trend innovation and targeting significant opportunities in faster-growing categories and adjacencies,” McMullian added.

“The expansion of Dave’s Killer Bread into the snacking category and the acquisition of Simple Mills, in combination with new product introductions like Nature’s Own Keto in our core bread markets, exemplify our alignment with consumers’ growing demand for differentiated, better-for-you products, and we remain excited about their continued growth potential.”

Speaking to investors and analysts on a call this morning, McMullian noted that the company is investing in “on-trend innovation and targeting significant opportunities in faster growing categories” in order to protect against economic uncertainty and challenges in packaged bread sales.

“We think we have things there to mitigate some of those headwinds,” he said. “But I think the biggest positive influence on our results going forward are going to be better consumer health. If you look at what’s going on in the category, there’s definitely a premiumization versus a value play going on here. What’s getting squeezed is the middle. And the middle, unfortunately, is where we have the most exposure.”

He added that differentiation will be “key” to reinvigorating Flowers’ bread business, with traditional white bread in particular struggling.

“Our philosophy is when we’re in economic situations like this, the way out of it is not to try to promote your way out of it,” he added. “We believe in using promotion primarily to drive trial, particularly as we bring out new innovative products and brands and not necessarily to drive volumes because that can devalue our business and the category.”