Flowers Foods’ stock has fallen 50% over the last twelve months. The company has cut its dividend in half.
Sales declined 4%, and net income fell 30%. Rising input costs and a sharp 5.8% drop in volume contributed to the weaker results.
Free cash flow appears to cover the reduced dividend for now. But continued sales and margin pressure has raised the possibility of another cut or a complete suspension.
The analysis maintains a Hold rating but expresses little conviction. It cites high debt and thin margins as significant risks for the consumer staples company.