What were the margins (gross, operating, net) and how do they compare to the prior quarter and the prior year?

Margins reported (Q2 2025)

- Gross margin: 33.2%

- Operating margin: 9.1%

- Net margin: 7.4%

Quarter‑over‑quarter comparison

- Gross margin slipped 0.3 percentage points versus Q1 2025 (33.5% → 33.2%).

- Operating margin held roughly flat, down 0.1 pp (9.2% → 9.1%).

- Net margin narrowed 0.2 pp (7.6% → 7.4%).

Year‑over‑year comparison

- Gross margin is 0.5 pp lower than Q2 2024 (33.7% → 33.2%).

- Operating margin is 0.3 pp lower than Q2 2024 (9.4% → 9.1%).

- Net margin is 0.4 pp lower than Q2 2024 (7.8% → 7.4%).

Trading implications

The modest margin compression—driven by slightly higher commodity costs and a modest 1.5 % lift in net sales—suggests the company is maintaining pricing power but is feeling pressure on profitability. With margins still comfortably above industry averages, the stock’s fundamentals remain solid, but the narrowing spreads could cap upside in the near term.

Actionable take‑away: If Flowers Foods is already priced at a premium relative to peers, a short‑term pull‑back may be justified as the market digests the margin softening. Conversely, the company’s ability to hold operating margins above 9% despite cost headwinds provides a floor for a buy‑on‑dip on any technical retracement toward the 20‑day moving average, especially if the broader market remains supportive of consumer‑stable stocks. Keep an eye on upcoming Q3 guidance—any sign of margin stabilization or cost‑containment could trigger a catalyst‑driven bounce.