Thesis
In February, Flowers Foods (FLO) CEO Ryals McMullian set out with the long-term goal to increase earnings by 8-10%. His two foundational means of achieving this lay in (1) increasing top line sales by 2-4% and (2) delivering “margin expansion by managing cost, reducing valueless complexity and driving efficiencies up and down the supply chain” – essentially, reducing margins. In the upcoming earnings call, if the company focuses too much on the first point, and too little on the second, investors could easily fall into the notion that Flowers Foods is set