10:12 AM EDT, 08/15/2025 (MT Newswires) -- Flowers Foods ( FLO ) lowered its full-year outlook on Friday as the packaged bakery food producer reported fiscal second-quarter revenue below market expectations amid softening traditional loaf sales and increased competition.

The company now anticipates per-share adjusted earnings to be in a range of $1 to $1.10 for fiscal 2025, down from its previous projections of $1.05 to $1.15. Sales are pegged at $5.24 billion to $5.31 billion, compared with the prior guidance of $5.3 billion to $5.4 billion. The current consensus on FactSet is for non-GAAP EPS of $1.09 and sales of $5.31 billion.

The acquisition of crackers, cookies, snack bars and baking mixes producer Simple Mills, completed in February, is forecast to negatively impact adjusted EPS by $0.08 to $0.07, according to Flowers Foods ( FLO ). The deal is estimated to contribute $218 million to $225 million to the topline, the company said.

"Our revised 2025 guidance reflects lower-than-expected second quarter revenues, largely due to softness in traditional loaf sales and a more-intense competitive environment, which we expect to persist throughout the year," Chief Executive Ryals McMullian said in a statement. "We are proactively working to mitigate this weakness with disciplined cost savings efforts."

For the three-month period ended July 12, the group's adjusted EPS decreased to $0.30 from $0.36, in line with the Street's view. Sales improved 1.5% to $1.24 billion, but trailed the average analyst estimate for $1.27 billion. The stock was down 2.9% in Friday trade.

Simple Mills contributed $61.4 million in sales during the quarter, helping to offset lower prices and volume declines, according to the company. The acquisition weighed on the bottom line by $0.01 a share, Flowers Foods ( FLO ) said.

Macroeconomic uncertainties and changes in consumer demand continued to weigh on the bread category, but the company's portfolio strategy has shown "promise in offsetting those headwinds," according to McMullian. The company is "proactively" investing in innovation and mergers and acquisitions to transform its portfolio and align it with consumer demand, the CEO added.

"We remain confident that our portfolio strategy will help maximize near-term performance while supporting more-consistent long-term growth," McMullian said.

Branded retail sales rose 5% year over year to $826.7 million, aided by the Simple Mills acquisition contribution, partially offset by reduced prices and volume. Revenue in the other segment fell 4.9% to $416.1 million, amid weaker volumes in store branded retail sales.

Selling, distribution, and administrative expenses increased to $473.5 million from $471.4 million in the prior-year period.

"Today's results display the challenges (Flowers Foods ( FLO )) has been facing and our hesitancy to become more constructive on the name," Truist Securities said in a client note. "However, the intense competitive landscape is a newer wrinkle."

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