Dive Brief:
- Flowers Foods CEO Ryals McMullian signaled the Wonder bread maker could sell off brands as part of a “comprehensive review” of its operations, supply chain and financial strategy.
- McMullian said the review is "in the early innings,” with Flowers’ CFO Diego Scaglione adding it will likely take several years to complete. Other changes the company could implement include plant closures, better leveraging of artificial intelligence and reinvigorating demand for key brands, such as its largest brand in Nature’s Own.
- The company expects category headwinds to persist in 2026, forecasting net sales of approximately $5.2 billion to $5.3 billion. Sales are expected to remain roughly flat or decline by up to 1.8% compared to the prior year.
Dive Insight:
Flowers has seen strong performance in its cakes and premium offerings. But a major challenge for the bread company remains its traditional loaf business, which is “underperforming” the overall category, McMullian told analysts.
Consumers, he noted, aren’t so much purchasing more private label breads, but rather turning to lower-priced branded items.
In addition to Nature’s Own and Wonder, Flowers also owns Dave’s Killer Bread and Simple Mills, a maker of better-for-you crackers, cookies, snack bars and baking mixes made from healthier and recognizable ingredients. . The company plans to funnel additional investment into innovation and "reigniting demand for traditional loaf and for Nature's Own," McMullian said.
Flowers, which posted net sales of $5.3 billion in its fiscal 2025 year, also said it took a $136 million noncash impairment charge tied to its intangible assets, reflecting a lower-than-expected outlook for some brands.
“We do not expect any further impairments based on our outlook for the remaining portfolio,” Scaglione told analysts. “We will continue to focus our efforts on brands with the greatest opportunity to grow and gain share while ensuring we satisfy our customers across various price points and needs.”
