2024-07-25 08:52:28 ET
Summary
- Flowers Foods is a US-based company specializing in packaged bakery foods, with a 17% market share in the country.
- The company has seen low growth on the top line and struggled with margins due to necessary investments back into the business.
- Flowers Foods reported Q1'24 results in line with expectations, but higher costs led to a 5% drop in share price, with ongoing challenges in margin expansion.
- I believe operational challenges and weakness in the broader macroeconomic environment remain headwinds for the company.
- While the valuation may look attractive relative to its historical multiple as well as its peer group, I think the company deserves to trade at a lower multiple for now.
Introduction
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Flowers Foods: High Costs Keep Me Away