Does a Higher Dividend Amid Lower Guidance Reveal a New Capital Allocation Priority at FLO?

• Flowers Foods, Inc. announced that its board of directors has declared a 3.1% increase in its quarterly dividend to US$0.2475 per share, marking the 92nd consecutive quarterly payment, with the dividend payable on September 19, 2025, to shareholders of record as of September 5, 2025.
• This sustained dividend growth reflects board confidence in the company’s ongoing ability to generate returns for shareholders despite recent adjustments to its outlook.
• We’ll explore how the board’s decision to raise the dividend, even as earnings guidance was lowered, may reshape Flowers Foods’ investment narrative.

We've found 19 US stocks that are forecast to pay a dividend yield of over 6% next year. See the full list for free.

Flowers Foods Investment Narrative Recap

To be a Flowers Foods shareholder, you need to believe in the company’s ability to transition its product portfolio from legacy breads to premium and health-focused brands, adapting to evolving consumer preferences and sustaining margins. The recent dividend increase, despite lowered earnings guidance, signals board confidence but does not materially change the catalysts or the biggest risk: whether Flowers Foods can sustainably grow revenue through innovation while navigating compressing margins and market shifts.

The downward revision in fiscal 2025 guidance, tied to more cautious expectations following the Simple Mills acquisition, connects directly to the question of whether Flowers Foods can maintain top-line momentum as it targets premium segments. This announcement remains central for investors gauging the health of ongoing portfolio transformations and its ability to counter declining core bread sales.

Yet, investors should keep in mind that, in contrast to dividend consistency, the risk from retailer consolidation and resulting margin pressure remains...

Read the full narrative on Flowers Foods (it's free!)

Flowers Foods' outlook forecasts revenues of $5.3 billion and earnings of $212.3 million by 2028. This assumes a 1.4% annual revenue growth rate and a $7.2 million decrease in earnings from the current level of $219.5 million.

Uncover how Flowers Foods' forecasts yield a $15.50 fair value, a 3% upside to its current price.

Exploring Other Perspectives

Seven members of the Simply Wall St Community have estimated fair values ranging from US$12 to US$25. With ongoing margin pressure and shifting sector dynamics, these opinions highlight just how differently the company’s outlook can be interpreted, take a closer look at other viewpoints to help inform your own.

Explore 7 other fair value estimates on Flowers Foods - why the stock might be worth as much as 66% more than the current price!

Build Your Own Flowers Foods Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Flowers Foods research is our analysis highlighting 2 key rewards and 2 important warning signs that could impact your investment decision.
• Our free Flowers Foods research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Flowers Foods' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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