Away-from-home food service business remained weak, contributing to softness in the unbranded/private label segment.
Flowers Foods faced pressure on end markets due to a challenging economic environment and shifting consumer trends impacting recent results.
Gross margin management included bakery closures and portfolio optimization to higher margin businesses, partially offsetting volume declines.
Promotional activity increased, especially around differentiated products, contributing to some positive performance in segments like Dave's Killer Bread (DKB).
Simple Mills continued to grow distribution points and performed well despite a cyber attack at UNFI affecting the second quarter.
Traditional loaf bread sales were pressured by new lower-priced entrants and a bifurcated market with strong performance at both premium and value ends.
BJ's Restaurants reported Q2 fiscal 2025 sales of $366 million, a 4.5% increase year-over-year, with comparable restaurant sales up 2.9% driven by 3.3% traffic growth.
Cost of sales was 24.8%, 90 basis points favorable year-over-year, with food cost inflation at approximately 2%, down from 3% in Q1.
Labor and benefit expenses were 35.4% of sales, 70 basis points favorable to last year, driven by better labor scheduling and operational execution.
Net debt decreased by $5.9 million to $34.5 million, supporting share repurchases and remodel investments.
Net income was $22.2 million with diluted earnings per share of $0.97, a 35% increase from $0.72 last year.
Occupancy and operating expenses were 22.8% of sales, slightly unfavorable by 10 basis points due to $2.5 million incremental marketing investments.
Restaurant-level cash flow margins improved by 150 basis points to 17%, and adjusted EBITDA margins increased by 120 basis points to 11.5%.
Adjusted operating margins declined to 3.5% from 6.0% last year, impacted by inflation in COGS (3.3%), labor (3.4%), health insurance, and higher operating expenses.
GAAP diluted earnings per share were $0.29, up from $0.28 last year; adjusted diluted EPS was $0.32, above guidance range of $0.22 to $0.27 but down from $0.45 last year.
Net debt was $867 million with leverage at 2.7x net debt to adjusted EBITDA and 4.1x lease adjusted net leverage; company aims to reduce lease-adjusted leverage below 3.0x.
Quarterly dividend declared at $0.15 per share; share repurchases are not planned currently.
Total revenues for Q2 2025 were $1 billion, slightly up from $999 million last year, driven by restaurant openings and closures.
U.S. comparable restaurant sales declined by 10 basis points, with traffic down 200 basis points, but results exceeded company expectations.
Adjusted EBITDA decreased 38% to $35.9 million, and adjusted net income declined 45% to $20.9 million.
Basic earnings per share decreased to $0.67, and adjusted EPS decreased 43% to $0.97 per share.
Branded Spirits sales declined 5%, with premium plus portfolio sales increasing 1%, while mid and value-tier brands experienced double-digit declines.
Capital expenditures were $10.6 million in Q2 and $18.7 million year-to-date, with full-year 2025 capex guidance reduced to approximately $32.5 million.
Consolidated sales decreased 24% to $145.5 million in Q2 2025 compared to the prior year, driven primarily by a 46% decline in Distilling Solutions segment sales.
Gross profit decreased 30% to $58.4 million, with gross margin declining 350 basis points to 40.1%.
Ingredient Solutions sales increased 5%, led by a 13% rebound in specialty protein sales and a 4% decline in Fibersym branded specialty wheat starch sales.
Net debt leverage remained stable at approximately 1.8x with a cash position of $17.3 million at quarter-end.
Year-to-date operating cash flow increased to $56.4 million from $29.6 million last year, driven by favorable working capital changes.
ADM reported adjusted earnings per share of $0.93 for Q2 2025 with total segment operating profit of $830 million.
AS&O segment operating profit was $379 million, down 17% year-over-year due to margin pressures from legislative and biofuel policy uncertainty.
Carbohydrate Solutions segment operating profit was $337 million, down 6%, with declines in EMEA due to higher corn costs and crop quality issues.
Cash flow from operations before working capital was down year-over-year due to lower segment profits, but inventory management improved with a $2.2 billion decrease in inventories.
Crushing subsegment operating profit declined 75% to $33 million, impacted by lower crush margins in soybeans and canola, especially in North America.
Leverage ratio was 2.1x at quarter end, with capital expenditures lowered to a range of $1.3 billion to $1.5 billion for 2025, down from prior guidance.
Nutrition segment revenues increased 5% to $2 billion, with operating profit up 5% to $114 million, driven by Flavors growth and Animal Nutrition margin improvements.
Refined Products and Other subsegment operating profit increased 14% to $156 million, helped by positive timing impacts despite lower biodiesel and refining margins.
Returned $495 million to shareholders in dividends during the first half of 2025.
Trailing four-quarter adjusted ROIC was 6.9%, and cash flow from operations before working capital changes was $1.2 billion for the first half of 2025.
Core operating profit increased 2% to $646 million, with ex-special EPS up 7% year-over-year to $1.44; reported EPS was $1.33.
Digital sales grew 18% this quarter, pushing the digital mix to a record 57%, with KFC's digital sales growing 22% and Taco Bell U.S. digital orders at 41%.
Franchise and property expenses increased by $16 million, driven by global franchise convention spend and lapping prior year bad debt recoveries.
G&A expenses ex-special increased 7% year-over-year to $274 million, including incentive compensation lapses; reported G&A was $302 million including $28 million special expenses.
Gross new unit openings totaled 871 with 386 net new units, led by KFC (566 gross openings), Pizza Hut (254), and Taco Bell (50).
Total restaurant level margins were 16.3%, down approximately 150 basis points year-over-year due to commodity cost laps and margin impact from newly acquired U.K. stores.
Yum! Brands delivered 4% system sales growth in Q2, driven by 3% unit growth and 2% same-store sales growth despite a tough consumer environment.
Dafinchi
