Aug 21, 2026 earnings call — Q2 results, innovation and cost actions
Fresh bread unit volume fell 9.5% in Q2; management plans innovation, new business wins and cost savings to stabilize performance.
Revenue $1.2B (est $1.2B) · EPS $0.21 (est $0.22)
Key quotes
"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."
"One is we do have some pretty significant new business wins that are coming on in 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."
Analyst Q&A 4
What will drive sales improvement
Q (Stephen Robert Powers · Deutsche Bank): Analyst asked which actions will drive sequential improvement in the back half and which initiatives will be most impactful. He also asked how quickly those initiatives will show results.
A: Management said three main factors will drive improvement: significant new business wins coming in the back half, additional cost savings, and new product innovation (protein, half loaves, sourdough). They expect some improvement timing split between Q3 and Q4, and said Nature's Own relaunch is early but showing good customer and social feedback.
"One is we do have some pretty significant new business wins that are coming on in the back half." — A. McMullian (CEO·CHAIR)
Pricing and commodity cost outlook
Q (Scott Marks · Jefferies): Analyst asked for an update on pricing dynamics and competitiveness in the category. He also asked where inflation stands now, the assumed exit rate in 2026, and the outlook/assumptions for 2027.
A: Management said price is only part of the story; consumer preference shifts and portfolio gaps (half loaves, sourdough, protein) are major factors, and they are reviewing pricing and promotion. On costs, they said most commodities for the balance of the year are fully hedged, packaging has exposure to oil/diesel/resin, the current guide did not change, and they are still planning for 2027 so cannot give detailed assumptions yet.
"As we mentioned in Q1, most of our commodities for the balance of this year are fully hedged." — Diego Scaglione
Levers vs. inflation and DKB marketing
Q (James Salera · Stephens): Analyst asked what levers besides pricing can offset commodity inflation into 2027. He also asked whether the marketing pullback at Dave's Killer Bread (DKB) is temporary or a strategic shift.
A: Management said levers include productivity and efficiency in bakeries, network actions taken after Q1 that create about a $20 million tailwind into 2027, and price-pack/product innovation to better match consumer demand. They said the DKB marketing pullback is temporary and a matter of cadence; they expect more normalized promo and marketing spend for the rest of the year.
"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." — Diego Scaglione
Margins, volume, DKB consumer shift, review status
Q (Mitchell Pinheiro · Sturdivant): Analyst asked how gross margin held up despite a 9.5% fresh bread volume decline, whether fixed-cost leverage is being managed, if Q3 volume declines will moderate, why Dave's Killer Bread volumes fell, and the status of the comprehensive review.
A: Management said price/mix was a big positive for gross margin, and restructuring, COGS cost-outs and bakery productivity also helped, though network optimization is harder and longer-term. They expect Q3 sales to be down year-over-year and Q4 to stabilize as new wins ramp; they said DKB is pressured by the rapid growth of sourdough (a $1.3 billion subcategory) and some price sensitivity, and that the comprehensive review is finished and now being executed.
"Mostly, we think that it's the growth of sourdough." — A. McMullian (CEO·CHAIR)