Flowers Foods, Inc. (NYSE:FLO) is having one of those mornings. The packaged bakery giant behind Nature's Own, Dave's Killer Bread, Canyon Bakehouse, Simple Mills, Wonder, and Tastykake reported weaker-than-expected third-quarter results and trimmed its full-year 2026 outlook, sending shares down 9.15% to $5.46 in Friday's premarket session.

At the heart of the problem is something pretty simple: Americans are watching their wallets, and bread is feeling the pinch.

Chairman and CEO Ryals McMullian laid out the trifecta of troubles: pressure on household budgets, changing consumer behavior, and heightened promotional activity. Price-sensitive shoppers are trading down to smaller loaves and alternative products, while aggressive promotions are making the competitive landscape that much tougher.

The company did try to freshen things up. It relaunched its Nature's Own brand with fewer, simpler ingredients and rolled out new products. But McMullian acknowledged that earlier pricing actions and the Nature's Own relaunch have delivered slower-than-expected improvements, particularly in traditional loaf bread, where category trends remain challenging.

Flowers Foods Misses Earnings and Revenue Estimates

The numbers tell the story. Adjusted earnings came in at 10 cents per share, missing the analyst estimate of 15 cents. Revenue fell 4.7% year over year to $1.169 billion, below the $1.180 billion estimate.

Net sales declined as favorable price/mix of 2.3% was more than offset by a 7.0% volume decline. Branded Retail net sales fell 5.1% to $772.1 million as lower volumes outweighed favorable pricing/mix. Other net sales dropped 4.0% to $397.0 million, primarily due to lower sales of store-branded products, partly reflecting discontinued business.

Adjusted EBITDA fell 33.2% to $78.9 million, and the adjusted EBITDA margin contracted by 280 basis points to 6.8%. Net income plunged 63.6% to $14.4 million, mainly due to lower sales volumes, higher marketing spending, higher logistics costs, and greater outside product purchases. Lower incentive compensation, ingredient costs, and distributor fees partially offset these pressures.

Weak Consumer Demand and Cost Pressure

The volume picture is ugly. Traditional loaf bread category volumes declined more than 5%, while sandwich buns and rolls volumes fell approximately 4%. Management highlighted that consumers increasingly favored smaller packages, affordability, alternative formats, and differentiated products.

CFO Anthony Scaglione also flagged fuel costs as a continuing headwind for the company and the broader food industry.

Cash Flow and Capital Return

Flowers Foods ended the quarter with $72.2 million in cash and approximately $1.68 billion in long-term debt. Year-to-date, the company invested $64.5 million in capital expenditures and returned $107.6 million through dividends.

2026 Outlook Lowered

Management didn't sugarcoat the forward view. Flowers Foods lowered its full-year revenue forecast to $5.016 billion-$5.063 billion from $5.070 billion-$5.142 billion. The revised range falls below the analyst estimate of $5.086 billion.

The company also cut its adjusted earnings forecast to 63 cents-68 cents per share from 75 cents-85 cents, below Wall Street's estimate of 77 cents. Adjusted EBITDA is now expected at $415 million to $430 million, compared to prior guidance of $453 million to $481 million.

McMullian expects near-term market conditions to remain challenging but emphasized the company's long-term opportunities across fresh packaged bread, cakes, better-for-you snacks, and foodservice.

FLO Price Action: Flowers Foods shares were down 9.15% at $5.46 during premarket trading on Friday, according to market data.