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Category: Flower Foods (FLO)
Date: 23 May 2021 Stock price of Flower Foods: $24.15 Market Capital of Flower Foods (FLO): $5.11 billion We take a look at the 1st quarter 2021 earnings report of Flower Foods (FLO) one of the largest producers of packaged bakery foods in the United States. For the quarter the group reported sales of $1.3 billion and net income of $77.4 million
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Ryals McMullian, Flowers Foods’ president and CEO - Our leading brands are thriving, and that strong performance would not be possible without the dedication and perseverance of our team members. I want to extend my sincere thanks for their efforts."
More About Flower Foods (FLO)
Headquartered in Thomasville, Ga., Flowers Foods, Inc. (NYSE: FLO) is one of the largest producers of packaged bakery foods in the United States with 2020 sales of $4.4 billion. Flowers operates bakeries across the country that produce a wide range of bakery products. Among the company’s top brands are Nature’s Own, Dave’s Killer Bread, Wonder, Canyon Bakehouse, and Tastykake
Overview of Flower Foods (FLO) 1st quarter 2021 earnings
First Quarter Summary: Compared to the prior year first quarter where applicable
- Sales decreased 3.5% to $1.302 billion compared to record results in the prior year period driven by the pandemic.
- Net income increased $77.4 million to $71.7 million due primarily to a $116.2 million charge in the prior year period related to the termination of one of our pension plans. Adjusted net income increased 1.3% to $87.6 million.
- Adjusted EBITDA decreased 1.0% to $161.6 million. Adjusted EBITDA represented 12.4% of sales, a 30-basis point increase.
- Diluted EPS increased $0.37 to $0.34. Adjusted diluted EPS was consistent with the prior year period at $0.41.
Flower Foods (FLO) management commentary on their 1st quarter 2021 earnings
THOMASVILLE, Ga. – Flowers Foods, Inc. (NYSE: FLO), producer of Nature’s Own, Dave’s Killer Bread, Wonder, Canyon Bakehouse, Tastykake, and other bakery foods, today reported financial results for the company’s 16-week first quarter ended April 24, 2021
CEO’s Remarks:
“Flowers delivered impressive results to start 2021,” said Ryals McMullian, Flowers Foods’ president and CEO. “Our leading brands are thriving, and that strong performance would not be possible without the dedication and perseverance of our team members. I want to extend my sincere thanks for their efforts. “As the economy reopened in most of the country, our branded retail mix moderated somewhat toward the end of the quarter and foodservice began to recover,” he continued. “However, it is important to note that branded retail demand remains elevated over pre-pandemic levels. To maintain our momentum and sustain the growth of our brands, we are continuing to invest in innovation and marketing. We believe those investments benefited our results in the first quarter, and we expect them, together with our portfolio strategy, digital initiative, and efficiency programs, to drive our future performance. We have performed exceptionally well over the last year and are confident these actions we are taking today, guided by our strategic priorities, are positioning Flowers to deliver results consistent with our long-term financial targets.”
CEO’s Remarks:
“Flowers delivered impressive results to start 2021,” said Ryals McMullian, Flowers Foods’ president and CEO. “Our leading brands are thriving, and that strong performance would not be possible without the dedication and perseverance of our team members. I want to extend my sincere thanks for their efforts. “As the economy reopened in most of the country, our branded retail mix moderated somewhat toward the end of the quarter and foodservice began to recover,” he continued. “However, it is important to note that branded retail demand remains elevated over pre-pandemic levels. To maintain our momentum and sustain the growth of our brands, we are continuing to invest in innovation and marketing. We believe those investments benefited our results in the first quarter, and we expect them, together with our portfolio strategy, digital initiative, and efficiency programs, to drive our future performance. We have performed exceptionally well over the last year and are confident these actions we are taking today, guided by our strategic priorities, are positioning Flowers to deliver results consistent with our long-term financial targets.”
For the 52-week Fiscal 2021, the Company Expects:
The company’s outlook includes the following assumptions:
- Sales in the range of approximately $4.234 billion to $4.300 billion, representing a change of approximately -3.5% to -2.0%. This change includes a 1.8% reduction in sales due to one fewer week in fiscal 2021.
- Diluted EPS in the range of approximately $1.10 to $1.17. The effect of one fewer week in fiscal 2021 impacts EPS by approximately $0.02.
The company’s outlook includes the following assumptions:
- Depreciation and amortization in the range of $135 million to $140 million
- Net interest expense of approximately $10 million • An effective tax rate of approximately 24.5%
- Weighted average diluted share count for the year of approximately 213 million shares
- Capital expenditures for the year in the range of $140 million to $150 million
Flower Foods (FLO) stock price chart over the last 5 years
The image below shows the stock price history of Flower Foods (FLO) over the last 5 years. And its been a good time for Flower Foods stockholders with the stock increasing by 33.4% over the last 5 years.
The stock of Flower Foods is trading at closer to its 52 week high than it is to its 52 week low which is a clear indication that the short term sentiment and momentum of Flower Foods stock is positive at this point in time.
The stock of Flower Foods is trading at closer to its 52 week high than it is to its 52 week low which is a clear indication that the short term sentiment and momentum of Flower Foods stock is positive at this point in time.
Latest stock valuation of Flower Foods (FLO)
So what is Flower Foods (FLO) stock worth based on their 1st quarter 2021 earnings report? Based on their earnings report our valuation model provides a target price (full value price) for Flower Foods at $18.90 a stock
We therefore believe the stock of Flower Foods is overvalued at its current price of $24.15
We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target price (full value price), which in this case is $18.90, thus a good entry point into The BrightView would be at $17 or below.
We expect the stock of Flower Foods to pull back from current levels in coming weeks and months to levels closer to our target price (full value price), as their stock is price is overvalued.
We therefore rate the stock of Flower Foods as a sell
We therefore believe the stock of Flower Foods is overvalued at its current price of $24.15
We usually recommend long term fundamental or value investors look to enter a stock at least 10% below our target price (full value price), which in this case is $18.90, thus a good entry point into The BrightView would be at $17 or below.
We expect the stock of Flower Foods to pull back from current levels in coming weeks and months to levels closer to our target price (full value price), as their stock is price is overvalued.
We therefore rate the stock of Flower Foods as a sell
Next earnings release of Flower Foods
It is expected that Flower Foods will release their 2nd quarter 2021 earnings report in late August 2021
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