Shannon, Conference Call Operator: Good day, and thank you for standing by. Welcome to the Flowers Foods second quarter 2026 results conference call. At this time, all participants are in listen only mode. After the speaker’s presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 1 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 1 1 again. Please be advised that today’s conference is being recorded. I would now like to hand the conference over to your speaker today, J.T. Rieck, Executive Vice President of Finance and Investor Relations. Please go ahead.

J.T. Rieck, Executive Vice President of Finance and Investor Relations, Flowers Foods: Good morning. I hope everyone had the opportunity to review our earnings release, listen to our prepared remarks, and view the slide presentation that were all posted earlier on our investor relations website. After today’s Q&A session, we will also post an audio replay of this call. Please note that in this Q&A session, we may make forward-looking statements about the company’s performance. Although we believe these statements to be reasonable, they are subject to risks and uncertainties that could cause actual results to differ materially. In addition to what you hear in these remarks, important factors relating to Flowers Foods business are fully detailed in our SEC filings. We also provide non-GAAP financial measures for which disclosure and reconciliations are provided in the earnings release and at the end of the slide presentation on our website.

Joining me today are Ryals McMullian, Chairman and CEO, and Anthony Scaglione, our CFO. Ryals, I’ll turn it over to you.

Ryals McMullian, Chairman and CEO, Flowers Foods: Okay. Good morning, everybody. As noted in our prepared remarks, our second quarter results did not meet our expectations. The fresh packaged bread category remained challenging, reflecting pressure on household budgets, shifting consumer preferences, and sustained competitive activity. Against this backdrop, we’re accelerating initiatives to better align our resources and value proposition with where the market is heading. This includes advancing innovation in smaller formats, sourdough, and protein, improving our in-store execution, pursuing new business, and continuing to invest behind our leading brands. As the Nature’s Own relaunch, new business wins, and innovation initiatives build momentum, we expect them to support greater stability and improved performance. We have work to do, but we remain confident in our strategy, our brands, and the actions that we are taking. Shannon, we can go ahead and open up for questions.

Shannon, Conference Call Operator: Thank you. As a reminder, to ask a question, please press star one one on your telephone and wait for your name to be announced. To withdraw your question, please press star one one again. Our first question comes from the line of Steve Powers with Deutsche Bank. Your line is now open.

Steve Powers, Analyst, Deutsche Bank: Great, everybody. Good morning. Thank you. Ryals, maybe we can pick up a bit where you left off in that intro. If I think about the implied performance in your updated guidance for the back half, even at the low end, it seems to imply some acceleration and some improvement, certainly versus the exit rate of consumption that we saw coming out of 2Q. Maybe a bit more detail on the building blocks that you see to create that sequential improvement, because it doesn’t sound like you’re expecting the category to improve. It sounds like you’re expecting your own standing versus the category to improve. So, which of the initiatives are expected to be the most impactful and, I guess, a little bit of how quickly we should expect them to manifest over the remainder of the year?

Ryals McMullian, Chairman and CEO, Flowers Foods: Okay. Yeah, thanks, Steve. A few things, and I’ll let Anthony chime in here as well, in terms of guidance. I would call out three primary factors to address the question you asked. One is we do have some pretty significant new business wins that are coming on in the back half. In addition to that, we took additional cost savings measures that will benefit the back half, and that’s in addition to the roughly $200 million we’ve taken out of the business over the last several years. I’d also call out innovation, which is a particularly important factor when you think about where the category is going. The speed of the shift in consumer preferences, frankly, got a little bit ahead of our innovation pipeline.

The good news is we have those things coming to fill those gaps in our offerings, whether you’re thinking about protein, half loaves, sourdough, et cetera. All that’s coming in the back half, and then as we move into the spring of next year. Anthony, anything you want to add?

Anthony Scaglione, Chief Financial Officer, Flowers Foods: No, I think you covered it. I would say, Steve, if you look at it for the back half, it is a little skewed. We expect some year-over-year declines in Q3, but then normalization for all the factors that Ryals mentioned, related to the new business wins, reduced elasticities as we are lapping prior year pricing in Q4, and a bit of stabilization in Nature’s Own from the marketing investments continue to take hold.

Steve Powers, Analyst, Deutsche Bank: Great. Maybe if you could, a little bit more color. It sounds like you expect improvement both across the brand of retail business and the other segment where I would expect those new business wins to exist. Maybe a little bit more color as to which side of the business you see more improvement. Then, I would love a little bit more color on what you are seeing with the Nature’s Own relaunch and reasons for optimism with that. Thank you.

Anthony Scaglione, Chief Financial Officer, Flowers Foods: Steve, I think from the way we are looking at it is really split between our away from home business as well as our retail branded business. I would say we are seeing good opportunities and realization in both those areas. The timing of which some of it is going to come in Q3 and some of it will come in Q4. It is balanced wins across the portfolio.

Ryals McMullian, Chairman and CEO, Flowers Foods: Steve, just to address your question on the Nature’s Own relaunch. Recall we just started this a couple of months ago. I would say it is going well. It is a little bit too early to see the actual results read through. But we are getting really good feedback from customers, social media, et cetera. So there are some early indicators that it will be a successful campaign, but I think we have got to give it, as I said on the last call, we are going to have to give it a little bit more time for it to read through. That said, we do feel really good about the campaign and where we are headed with it.

Steve Powers, Analyst, Deutsche Bank: Understood. Okay. Thank you both. Appreciate it. I will pass it on.

Ryals McMullian, Chairman and CEO, Flowers Foods: Thanks, Steve.

Shannon, Conference Call Operator: Thank you. Our next question comes from the line of Scott Marks with Jefferies. Your line is now open.

Scott Marks, Analyst, Jefferies: Hey, good morning, everyone. Thanks very much for taking our questions. First thing I wanted to ask about, you noted in the prepared remarks, rising competition, rising promotional intensity. Obviously, you guys took some pricing earlier in the year with the expectation that you might see competitors follow, and it does not sound like that has happened quite yet. So just wondering if you can kind of give us an update on your thoughts around the pricing dynamics in the category and where you are and any thoughts of changes to some of the actions you have taken to maintain maybe more competitiveness versus peers in traditional loans.

Ryals McMullian, Chairman and CEO, Flowers Foods: Sure. I will take a stab at that first. I think it is important to remember that the dynamics in the category are about a lot more than price. I think in certain segments of the portfolio, that may be a factor. As we noted in the prepared remarks, we are taking a pretty intensive review of our pricing and promotional strategy. However, it is more than just price. I would point more to consumer preference shifts. Certainly, there has been some amount of trade down to private label and lower priced items. I think the bigger factor, at least in our performance relative to the category, has to do with those gaps in our portfolio. The under-penetration in half loaf, sourdough, protein, fiber, some of these more functional attributes that consumers are looking for. That is where our primary focus is.

That is not to say that we are ignoring the price equation. We are taking a hard look at that. My initial thesis is there probably are some pockets of the portfolio where that is a factor, but I do not think it is the overall driving force of our performance.

Scott Marks, Analyst, Jefferies: Appreciate the thoughts there. Maybe, there are some comments in the prepared remarks, I think from Anthony Scaglione, about 2027 seeing some inflationary costs potentially ticking up, notably from commodity and fuel exposure. Just wondering if you can give us an update on where you are seeing inflation right now, how you are thinking about the exit rate in 2026, and then maybe what you are assuming at this point for 2027, as well as any other color you can share about 2027 to help us frame your thinking. Thanks.

Anthony Scaglione, Chief Financial Officer, Flowers Foods: Sure, Scott. Let me take it in two parts. As we mentioned in Q1, most of our commodities for the balance of this year are fully hedged. We had some exposure, which I alluded to, in oil and diesel and indirectly in resin, and that is primarily in our packaging area. Our current guide did not change because we saw added pressure from a commodity perspective. We assumed that pressure in Q1, and it has not really changed materially from where we were back in Q1. As I pivot to 2027, we are still in the middle of our planning process for fiscal 2027, so I cannot provide further color on that in isolation. To Ryals McMullian’s point, input costs are just one of many variables that we have to factor as it relates to price mix and the architecture and new innovation. Cannot look at it in isolation.

That being said, overall inflation has gone up in many of our categories from a pricing index perspective. It’s something that we need to definitely address as we look at 2027 and the exit velocity, as you mentioned, coming out of 2026. It’s something we’re working to address going forward, and as I mentioned in my prepared remarks, more to come. But at this point, that’s all we could say as it relates to 2027.

Scott Marks, Analyst, Jefferies: Understood. Appreciate it. I’ll pass it on.

Shannon, Conference Call Operator: Thank you. Our next question comes from the line of Jim Salera with Stephens. Your line is now open.

Jim Salera, Analyst, Stephens: Hey, guys. Good morning. Thanks for taking our question.

Ryals McMullian, Chairman and CEO, Flowers Foods: Hey, Jim.

Jim Salera, Analyst, Stephens: I wanted to follow up on your commentary to Steve and Scott’s questions there. If I look back to 2022, that was, I think, the last time we had kind of a significant commodity cycle. If my model serves me correct, net price mix across the business was up kind of mid-teens in 2022, which was a big factor in helping to offset that. Correct me if I am wrong, but it sounds like there is maybe not as much flexibility on a go-forward basis around pricing, given some of the competitive dynamics. So if you could just walk us through what other levers you might have in the business to help offset that commodity inflation that we are seeing and kind of anticipating to continue to roll through in 2027.

Anthony Scaglione, Chief Financial Officer, Flowers Foods: Yeah, let me start on that, Jim. I would say, clearly, we have to look at productivity measures, which is part of our every annual process and throughout the year, we are looking at ways to be more efficient in the bakeries and the network, et cetera. We took action coming out of Q1 when we saw softness on the top line. That will accrue from a tailwind perspective as we exit 2026 into 2027. As we said on the prepared remarks, that is roughly around the $20 million tailwind we will have going into 2027. The other area is going to be the price pack architecture. As Ryals mentioned, coming together with new products around small loaf, bring to market, innovation and sourdough, areas where the consumer has headed and where the consumer is. We are probably under-penetrated on a portfolio basis.

We have great products coming to market in the near term, but we are probably under-penetrated today. So when we look at those factors, it gives us confidence that yes, price probably is not going to be the only lever to overcome the inflation. As I mentioned earlier, a lot more work to do around that as we continue the 2027 planning process.

Jim Salera, Analyst, Stephens: My follow-up question is on DKB. In the prepared remarks, you guys touched on marketing pullback there. Just would love some more commentary around. Is that a temporary reshift where maybe other brands need some more support? Are you guys reworking the marketing plan there? Did it shift within the portfolio, maybe towards some of the innovation, versus the core fresh bread offering? Any thoughts there would be great.

Ryals McMullian, Chairman and CEO, Flowers Foods: Yeah, Jim, it’s temporary. It’s the way we laid out the cadence of our marketing and promo spend this year. We focused a lot at the beginning of the year with the, you may recall, the Rock Your Reset campaign that we did with DKB. And then also, to your point, also a focus on back to school. So we should see more normalized levels of promo and marketing spend with DKB for the balance of the year.

Jim Salera, Analyst, Stephens: Great. Thanks. I’ll pass it on.

Shannon, Conference Call Operator: Thank you. As a reminder to ask a question at this time, please press star 1 1 on your touch tone telephone. Our next question comes from the line of Mitchell Pinheiro with Sturdivant & Co. Your line is now open.

Mitchell Pinheiro, Analyst, Sturdivant & Co: Hey, good morning. I was looking at your fresh bread volume decline, which was 9.5%, and that is a big number. I was surprised at how well the gross margin held up despite the unit volume decline in fresh bread. How do you manage that?

Anthony Scaglione, Chief Financial Officer, Flowers Foods: Hey, Mitch, this is Anthony. Clearly, price had a big contributor in the price mix from a volume decline. Our pricing definitely was a positive contributor as it relates to overall. As we look forward into the earlier comments, there are other variables that we are looking towards as we think about the balance of this year in 2027, and price pack architecture is one that I mentioned earlier. Price was definitely the contributing factor to answer your question.

Mitchell Pinheiro, Analyst, Sturdivant & Co: Negative fixed asset leverage, you have been able to manage that, or how should we think about that?

Anthony Scaglione, Chief Financial Officer, Flowers Foods: Yeah. Obviously, the restructuring had some cost out in COGS. We have had good productivity as it relates to the bakery network. Clearly, that is our highest fixed cost, and while we are looking at network optimization, that is more complicated and takes much longer to execute. We are clearly constantly looking at ways to be more efficient within the four walls of our bakery and our network, and that drove some benefit. That becomes harder and harder with the volume declines. As you can imagine, that is something that we are looking at and continue to look at as ways to optimize going forward.

Mitchell Pinheiro, Analyst, Sturdivant & Co: Okay. As you look at the third quarter, do you expect volume declines to moderate?

Anthony Scaglione, Chief Financial Officer, Flowers Foods: Yeah, we don’t break that out. As I mentioned, we expect Q3 year-on-year to be down from an overall sales perspective, so that’s going to be price and volume based. Q4 to have a little bit more stabilization as the new wins get more fully ramped. That’s probably the most color I can give you in terms of the near term.

Mitchell Pinheiro, Analyst, Sturdivant & Co: Okay. I guess, two more questions. One with Dave’s Killer Bread. You mentioned that consumer shifts and consumer preferences as a reason that helped pressure the unit volume decline. What are you referring to?

Ryals McMullian, Chairman and CEO, Flowers Foods: Yeah. Mitch, it’s Ryals. Mostly, we think that it’s the growth of sourdough. It’s pretty remarkable, actually. That sub-segment of the category has already grown to be a $1.3 billion sub-category. So it’s been pretty tremendous growth. In DKB, we only have sourdough on the West Coast currently. As we mentioned earlier in the innovation pipeline, we have solves for all that. I would say that is certainly one area, and probably at least some amount of price sensitivity relative to Dave’s. As I said earlier, I don’t think it’s all price. It’s a combination of price for some consumers, but also offering and product attributes that are driving some of that decline.

Mitchell Pinheiro, Analyst, Sturdivant & Co: Okay. Thanks for that. This final question is, where do we stand with the comprehensive review? Where are we in that process? Are we close to the end? Is this a continuous improvement comprehensive review? Can you shed a little light on that?

Ryals McMullian, Chairman and CEO, Flowers Foods: Yeah. Well, I think we’re always in the mode of continuous improvement. But in terms of the formal initiative of the comprehensive review, yeah, we’re finished with that and beginning to execute on it.

Mitchell Pinheiro, Analyst, Sturdivant & Co: Okay

Ryals McMullian, Chairman and CEO, Flowers Foods: We’ve talked about today, whether it’s innovation or focus or better execution, all of those are folded in and are the result of that comprehensive review.

Mitchell Pinheiro, Analyst, Sturdivant & Co: Okay. All right. Thank you very much.

Ryals McMullian, Chairman and CEO, Flowers Foods: Thanks, Mitch.

Shannon, Conference Call Operator: Thank you. I am currently showing no further questions at this time. I would now like to hand the call back over to Ryals McMullian for closing remarks.

Ryals McMullian, Chairman and CEO, Flowers Foods: Hey, great. Thank you, Shannon. I just want to thank everybody for taking time today and joining us for questions. We very much appreciate your interest and support of our company. As always, we look forward to speaking with you again next quarter. Take care.

Shannon, Conference Call Operator: This concludes today’s conference. Thank you for your participation. You may now disconnect.