Flowers Foods (FLO) Q4 2025 Earnings Transcript

Image source: The Motley Fool.

DATE

Friday, February 13, 2026 at 8:30 a.m. ET

CALL PARTICIPANTS

• Chairman and Chief Executive Officer — Ryals McMullian
• Chief Financial Officer — Anthony P. Massaroni

TAKEAWAYS

• 2026 Revenue Guidance -- Management projected sales to range from down approximately 180 basis points to slightly up, with the category expected to decline by 4% due to ongoing headwinds and the impact of one fewer week.
• Dividend and Payout Ratio -- The 2026 guidance implies a dividend payout ratio well above 100% of forecasted EPS, and management confirmed the dividend remains under review as part of a broader capital allocation evaluation.
• Leverage and Covenants -- Net debt is currently estimated between 3.5 and 3.75 times EBITDA, which approaches the company’s 3.75 times bank covenant limit, but management stated, "we are in compliance with all the covenants."
• Debt Maturity and Refinancing -- There is a $400 million maturity due in October 2026, and management expects to refinance at "slightly higher" rates as part of a comprehensive capital structure review.
• CapEx Planning -- Maintenance capital expenditures are typically around $2 million per bakery per year, with additional amounts expected for special projects such as the ERP implementation.
• Brand Portfolio Review -- A multiyear comprehensive review of brands, supply chain, and financial strategy is underway, with a focus on "reinvigorating Nature’s Own," consideration of divestitures, and increased investment in innovation and marketing.
• Traditional Loaf Performance -- Nature’s Own, the largest and #1 brand for Flowers Foods, continues to underperform category trends, contributing to operating deleverage; management is targeting this segment for renewed brand innovation and demand generation.
• Simple Mills Growth and Margin -- Simple Mills finished 2025 with top-line growth of approximately 14%, below prior guidance of 20%-23%, with margins declining to 11% EBITDA in Q4 due to disruptions from inventory timing, coconut sugar supply issues, higher almond flour costs, and tariff impacts; management expects double-digit sales growth and continued margin pressure in 2026.
• Direct-Store-Delivery (DSD) Structure -- Profit-and-loss responsibility for the DSD network, which accounts for 85% of the business, has been realigned to the regional level to drive greater local accountability and tailored decision-making.
• Category Dynamics -- Management observed a continued consumer shift from traditional loaf to value and premium products, with "private label is down" despite increased affordability pressures, and cited mix shift as the driver of higher price per unit in Q4.
• Supreme Court Case -- No expected material financial impact from the upcoming March Supreme Court decision; management stated, "there is nothing embedded in guidance."
• Promotions and Pricing -- In Q4, Flowers Foods "pulled back strategically on promotions" due to historically limited return on investment, using enhanced trade promotion management to protect share where necessary.

Need a quote from a Motley Fool analyst? Email pr@fool.com

RISKS

• 2026 EPS forecast remains below the current dividend payout, with management highlighting the need to review the dividend as part of its "overall strategic evaluation" and noting compliance with bank covenants remains critical given leverage in the 3.5-3.75 times EBITDA range.
• Simple Mills margins dropped from 16% to 11% EBITDA in Q4 due to "almond flour and tariffs," with management expecting these cost pressures and incremental brand investment to persist through 2026.
• Category headwinds are reflected in guidance for a 4% top-line decline, attributed to continued consumer shift away from traditional bread forms and macroeconomic pressures on affordability, per management commentary.

SUMMARY

Flowers Foods (NYSE:FLO) delivered financial results at the high end of 2025 guidance, but entered 2026 projecting flat to slightly declining top-line performance amid an ongoing four percent category contraction, an extra week headwind, and inflationary pressures. The comprehensive multiyear review now underway spans brand portfolio optimization—including potential divestiture and intensified innovation for underperforming traditional loaf items—supply chain efficiency upgrades, and disciplined capital allocation with a major dividend policy reassessment. Management detailed a 2026 capital structure plan including maintenance spend of $2 million per bakery and intentions to refinance $400 million in maturities, while reaffirming near-term compliance with leverage covenants despite net debt nearing its upper limit.

• Nature’s Own and Simple Mills were identified as pivotal focus areas, with Simple Mills facing Q4 sales below target and sustained margin pressure blamed on input inflation and tariffs.
• A shift of direct-store-delivery P&L ownership to the regional level was described as a strategic move to heighten local responsiveness and market alignment for the 85% of sales through this channel.
• Competitive pressures did not prompt major industry production rationalization, but Flowers Foods flagged a disciplined approach to promotions and product mix to navigate limited category growth dynamics.

INDUSTRY GLOSSARY

• Direct-Store-Delivery (DSD): Company-owned logistics system for delivering finished goods directly from bakeries or warehouses to retail outlets, bypassing central distribution, and managed here at the regional rather than national level.
• EBT Purchases/SNAP: Consumer purchases made using Supplemental Nutrition Assistance Program benefits, cited as a source of pressure affecting lower-income household demand for bread products.
• ERP Project: Enterprise Resource Planning system implementation referenced as a designated capital expense area for Flowers Foods across 2026 and 2027.
• TPM Capabilities: Trade Promotion Management systems; programs and tools used by Flowers Foods to optimize, analyze, and evaluate the effectiveness of promotional spending and ensure ROI.

Full Conference Call Transcript

Ryals, I will turn it over to you. Okay. Thanks, JT. Good morning, everybody. Welcome to the fourth quarter call. I am pleased with the progress that we are making to transform our business. Led by the strong performance of our leading brands and disciplined execution of efficiency initiatives, we produced results at the high end of our 2025 guidance range. Now as we look to 2026, our guidance does reflect ongoing category challenges, one fewer week, inflationary pressures, but also additional investments in our leading brands.

In response to the headwinds that we are facing, we are conducting a comprehensive review of our operations, including our brand portfolio, supply chain, and financial strategy, to strengthen execution and position our business to reignite top line growth and expand margins over time. I want to thank our dedicated Flowers team for their hard work and resilience during this period of change, and our shareholders for their ongoing support. We remain focused on navigating near-term challenges while also laying the foundation for sustainable long-term growth. And with that, Tanya, we are ready for questions.

Operator: Certainly. As a reminder, to ask a question, please press 11 on your telephone and wait for your name to be announced. We will now open for questions. Our first question will be coming from the line of Steve Powers of Deutsche Bank. Your line is open.

Steve Powers: Thanks for taking my question. Great. So Ryals and Anthony, you both spoke to the comprehensive review that you have begun on brands and operations, etc. I guess maybe just if you could, and I know Anthony talked about it being the first inning of that process, but maybe talk a little bit more about how you scoped that exercise, what the project plan is, kind of what things are in or out of consideration? Just any more meat on those bones would be helpful. Anthony, if you have any estimate of how long the game lasts, that also would be helpful.

Ryals McMullian: Sure, Steve. I will start and let Anthony fill in. And I certainly will provide more details on this. We are in the early innings of the review. But at a high level, we are conducting a complete review of our brand portfolio, the manner and magnitude with which we are supporting that brand portfolio. We are evaluating other areas that are in additional need of investment. I think we are all aware that, by and large, the portfolio is performing very well across cake and our innovative platform and premium. The real issue for us is traditional loaf where we under-index, and that has been underperforming the category, and that has downstream effects in terms of operating deleverage, etc.

So one of the key focus areas, Steve, is how do we reinvigorate Nature’s Own. Reigniting growth of that brand, generating demand for that brand is going to be a key focus area for us. In addition, taking a look at supply chain, inclusive of the distribution network, to ensure that we are squeezing as much efficiency out of our operations as possible is another key area of focus. So as we move through the year, we will continue to provide you all more and more detail as we go through the year. We are just in the early stretches right now. Yeah.

And I would just add, I would characterize the review as a measured approach, working with Ryals and the rest of the management team on the evaluation around the portfolio, where it makes sense to invest, and this really leads to the CapEx conversation as well, where we are going to make those investments. It is a thoughtful and broad review. It is really not intended to be just for this year, but it is a multiyear process. I do not know when we are going to get to the top of the seventh, but we will continue to make progress and provide that update along the way.

Steve Powers: Okay. Great. And I guess as part of that, Anthony, you spoke in the prepared remarks about the overview of capital allocation, and some of that will be your review of the capital expenditures that you just spoke to. But maybe if you could speak a little bit more broadly to capital allocation. We have spoken on this call in general about the dividend run rate of Flowers, and obviously, cash flow has exceeded GAAP income, but at the same time, the call for 2026 EPS is obviously below the dividend commitment. So just how you are thinking about capital allocation more broadly inclusive of that dividend. Thank you.

Ryals McMullian: I appreciate the question. It is a great question. And we understand that the dividend is top of mind for investors, and our focus has always been driving shareholder value. And we want to convey the importance that we place on the evaluation of our capital structure and our capital allocation, and that is obviously a conversation we have with our Board. I think we need to make progress on the overall strategic evaluation to determine if, what, and how much we alter that capital allocation and direction.

But I would also like to say we remain committed, and think we mentioned this in the prepared remarks as well, to our strong balance sheet, and we recognize the benefits of the investment grade rating.

Steve Powers: Very good. Thanks. I will pass it on. Thank you.

Ryals McMullian: Thanks, Steve.

Operator: And our next question will be coming from Jim Salera of Stephens. Your line is open.

Jim Salera: Hey, Ryals. Hey, Anthony. Good morning. Thanks for taking our question. Hey, Ryals, I was hoping you could offer us just kind of a high-level thought given your experience in the industry. What do you think the industry, both yourselves and other prominent players, can do to really stabilize this kind of traditional loaf piece of the category? Often in your remarks, you call out the pockets of growth for DKB and a lot of the specialized offerings that you have. But it seems like the traditional loaf is kind of the thorn in the side, and it has been that way for quarter after quarter.

Is there a point where the marginal household is just finally washed out of the category, we can get to a stabilization point? Or do you see the frequency of consumption even for households that stay in the category continue to decline? Can you try to size up what we should be looking for to kind of get a glide path back to some semblance of flat to then hopefully positive in the future?

Ryals McMullian: Yes. Great question, Jim. And as I said, that is the key to everything for us, really, because we do have so much strength in the other parts of the portfolio where we have heavily invested. We have been extremely innovative in those other parts of the portfolio. We have talked a lot about not only the shift to value in this most recent conversation about affordability, but also the shift to premium differentiated, and we have been a key player there and our efforts have certainly paid. You can see that in the numbers and in the share data. You are absolutely right. Traditional loaf is the key for us. It is our largest brand in Nature’s Own.

It is also the number one brand. I think that soft variety will continue, or traditional loaf rather, will continue to be an important part of the category. But if the trends that we see continue, whether that is a shift to premium, whether it is a shift to value inclusive of small loaves, because I do think a portion of the current value play, if you will, is driven by macroeconomic factors that we see all the time in the bread category.

I think the difference now whereas traditionally you would have seen a shift to private label, you are seeing a shift to lower-priced branded offerings that are priced at parity or slightly above private label, and in the same environment, private label is down. So it is different this time around. But I think that the pure value play is cyclical. I think small loaves, however, offer something different. Not only is it value, it certainly addresses that area of the market, but it is also demographic shifts, Jim. Smaller households, people getting married later, a desire not to waste product, in addition to in the current environment, it being more of a value offering.

So my point in saying all this is over time, I do think you are going to see the shelf evolve and change overall. And so it is very important for us to be prepared to shift with that. And we believe there are things that we can do with Nature’s Own, given its high loyalty rate, given its awareness, given that it is the number one brand, to bring additional attributes to consumers that they will value. So I do think that there is a path there. And we are excited about the changes that we have upcoming for that segment of the portfolio.

If we are successful in doing that, Jim, that goes a long way to getting us back at least to a stable state in traditional loaf, which will be very meaningful for the business, if not slight growth, and recapture some of that operating deleverage. Also important, though, to say at the same time, as Anthony and I both noted, our supply chain review is involved in this too. So it is important to do both, to both address the demand for traditional loaf primarily but also address our fixed cost base and ensure that we are operating as efficiently as possible.

Jim Salera: Thank you. I appreciate all the detail on that. Maybe tying that to 2026, we just think about the kind of interplay between the ramp in Simple Mills and then the legacy portfolio. Can you just give us a sense on the cadence on the top line? I mean, obviously, 4Q has the 53rd week lap, but just should we expect a lot of the Simple Mills to kind of hit at the beginning of the year? Is it more of a gradual rollout, just kind of the cadence of the top line growth as we roll through the year?

Ryals McMullian: Yes. So if you think about the guide, the range is down roughly about 180 basis points to slightly up, effectively flat. And from that, we said the category, we expect the category to be down 4% from a headwind, which is anyone’s guess at this point. But we felt taking a rational approach and conservative approach, looking at that from that lens. The extra week adds about 150 basis points of pressure. And then the rest is going to be a combination of the Simple Mills ramp and the growth being from share and rate as we plan out the year. Okay. Thanks, Jim.

Operator: And our next question will be coming from Max Gumport of BNP Paribas. Your line is open.

Max Andrew Gumport: Hey, thanks for the question. I wanted to come back to the dividend and just get more clarity on why not cut the dividend today. With your payout ratio going to well above 100% of your guidance for EPS, your leverage being in a difficult place. It looks like your current net debt represents anywhere from 3.5 to 3.75 times your outlook for EBITDA this year, which puts you at risk of tripping your 3.75 times covenant. And then, clearly, you are in a difficult place right now in determining how to finance the business going forward as you have come to the market with your outlook for 2026, but with no CapEx plans for the year.

So would it not have been simpler just to cut the dividend now and get back to focusing on operations? Just looking for more clarity there.

Ryals McMullian: Very much. Thank you. I will take it and then pass it to Ryals. I think the team has stated this before. Dividend is a function of our discussion clearly with our Board, our capital structure, overall allocations. And we recognize the need to address that holistically in light of both our strategy and overall capital structure, and our intent is to plan to provide that detail in the upcoming quarters. But I want to reiterate what Ryals just said. We are in the early days of this comprehensive review.

I cannot necessarily discuss the dividend in detail at this point, but it is something that we are reviewing in light of our capital structure, in light of the bank covenant. What I would say, we are in compliance with all the covenants, and we have a strong relationship with our syndicates, and we expect to refinance the upcoming maturity and also make some progress on debt pay down. So it is part of our overall review, and hopefully, that is helpful.

Max Andrew Gumport: Great. And then as a follow-up, I am just looking for a bit more clarity on a few factors with regards to what is embedded in your outlook for 2026. So, really, it is on four factors, so I apologize for the long question. But the first is what are you factoring in with regards to the reduced SNAP budgets this year? The second is what potential impacts are you assuming from the Supreme Court case you have in March? The third would be on that debt refinancing, the $400 million in October that is coming due, are you assuming a refinancing at higher rates occurs in your outlook for 2026?

And then the fourth would just be it seems like your guidance is embedding very large market share gains. So you are saying the category is down 4%, but it sounds like organic is closer to just below flat. So just what is behind that large market share gain assumption? Apologies for the long question, but thanks very much.

Ryals McMullian: So I will start with the SNAP, and we recognize the reduction in EBT purchases and the pressure on the lower income households, which is why I think our diverse portfolio of brands and products are structured to appeal at all household demographics. We do not break that out specifically, but we are monitoring well that channel, ensuring that we are providing value at those price points.

Max Andrew Gumport: The Supreme Court.

Ryals McMullian: I wanted to talk about the other question. So the debt refi, as I mentioned, we are working with our syndicates as well as looking at the most efficient way to refinance. We are highly confident that refinancing work would occur. Obviously, rates are going to be slightly higher than the rate of the bond that we are taking out. But we feel confident that is going to be part of our process as we look at the overall capital structure going forward. And then the last two questions were the market share gain. Could you repeat that question? Yeah. I will take that one anyway on the market share gains.

Max, if you are still listening, as we have talked about, we anticipate making incremental investments in our brands. Also, innovation that we have coming forth across the portfolio inclusive of Simple Mills having a record year for innovation, introducing 13 new items. The DKB snack brands coming forth with new items. And then obviously further innovation in the core. We also have our increased marketing investment that we are making this year. So all of those would give us confidence that we can continue to gain share in the marketplace. As for the Supreme Court ruling, there is nothing embedded in guidance. So I do not think we would—that is more of an operating issue.

We would not expect any material financial impact from a decision one way or the other.

Operator: And our next question will be coming from Mitchell Pinheiro of Sturdivant & Co. Your line is open.

Mitchell Brad Pinheiro: Hey, good morning.

Ryals McMullian: Good morning.

Mitchell Brad Pinheiro: Hey. So as it relates to the supply chain review, as you look at the traditional loaf market, and, obviously, that is getting a little smaller. Should we anticipate perhaps some either bakery consolidation or is that part of the review?

Ryals McMullian: Yeah. That is part of the review, but I would say that is an ongoing process. You are aware, we have closed several bakeries over the last few years, most recently a bakery in Atlanta, one in Louisiana, one out in Arizona. So this has been sort of normal course for us as we continually review operations. I think when we talk about supply chain reinvention in terms of this review, it is a bit more global in terms of how can we better leverage digital, AI, automation, in addition to network optimization.

So it is more fully encompassing and looking at the whole picture and inclusive of the distribution network as well, how we get to market, where we place our DCs, etc.

Mitchell Brad Pinheiro: Okay. And you know, I saw that you are moving your DSD, you know, the P&L responsibility to a regional—back to the regional level. And this, you know, obviously, is a return, I guess, to the past a little bit. Is that—where do you see and how do you see that benefiting Flowers going forward?

Ryals McMullian: Yeah. So it is not merely a return to the past. I mean, maybe as you said, a little bit. But as we took a look at our operations and how we are operating our business, there are regional differences in terms of consumer preferences, things like that. We also felt that there was a need for greater accountability closer to the individual markets.

And by moving—and this is for DSD, which is 85% of the business, does not really apply to the balance of the business—but for DSD, you know, have that higher degree of P&L accountability a bit closer to the market, and in some cases having more local decisions, we thought was a prudent move to make in the current environment we are operating. Obviously, this is a very challenging time for the company and for the industry, and so making sure we have accountability in the right place, the right people in the right place, is of paramount importance.

Mitchell Brad Pinheiro: Okay. And then I guess just last question. Does optimizing your brand portfolio—does that mean potentially selling brands?

Ryals McMullian: I mean, we are looking at everything. I certainly cannot comment specifically on any contemplated divestitures, but it really is focused on optimizing the portfolio in a way that sets us up best for success. So, yeah, that can mean anything from additional investment in brands to rationalization to, yes, potential divestitures, but there is nothing concrete on the table at the moment.

Mitchell Brad Pinheiro: Okay. Alright. Thank you.

Ryals McMullian: Thanks, Mitch. Thank you.

Operator: And as a reminder, if you would like to ask a question, please press 11 on your phone. Our next question is a follow-up from Max Gumport of BNP Paribas. Your line is open.

Max Andrew Gumport: Thanks. Just a couple housekeeping ones. So first would be, is there a level of maintenance CapEx you could speak to just as we are thinking through our models and the lowest level of CapEx we could potentially be putting in the model for 2026?

Ryals McMullian: Yeah. Yeah. Yeah. Let me qualify that. So maintenance CapEx for us is just, as you can imagine, the normalized CapEx that we look at across our bakery and real estate network, and that usually runs around $2,000,000 plus or minus per bakery per year. And then looking at that from a historical, you know, there is always going to be a special project or an initiative that is going to require CapEx, and clearly, we have the rest of the ERP project that we need to complete in 2026 and 2027. So that hopefully gives you a little bit of a range of looking at it from the overall picture.

There is an amount that we intend to deploy as part of that maintenance. It is really looking at that growth CapEx and really focusing our efforts and being laser-focused on that, and that is what is inhibiting us at this point from providing that range. But as I mentioned in my prepared remarks, most likely, that outcome is going to be the continued prudent approach that we have had in the past.

Max Andrew Gumport: Great. And then on the $0.08 impact to EPS from incentive compensation, any color on the cadence in which that wind-down occurred in 2025? I imagine that a large chunk came in 4Q, but partly came in 2Q and 3Q as well. So any more explicit help on cadence you could give us with regard to the $0.08?

Ryals McMullian: Yeah. We actually adjust our accrual quarterly. And most of that adjustment occurred in the first three quarters of last year, just given the revised estimate. So when you look at the cadence, it is more first three quarters versus Q4.

Max Andrew Gumport: Okay. And then on Simple Mills sales, it looks like in 4Q, you ended the year a bit below the full year guidance, which I believe was 20% to 23%. You reported closer to 14%. So it seems like 4Q came in a bit light of expectations. At the same time, your commentary still sounds pretty good on Simple Mills. So did anything go off that held back Simple Mills sales in 4Q 2025?

Ryals McMullian: Yeah. Max, it is Ryals. Couple of things. One, there were some inventory deloading related to one distributor that kind of disrupted the timing of sales during that period. And Simple Mills also had an issue with some coconut sugar that came in. All the affected inventory was in our control, so there was no recall or anything like that. But that contributed to a little bit of a disruption in terms of sales timing in the fourth quarter. But to your point, we still feel great about Simple Mills. We expect them to be top line up double digits next year. Lots of innovation coming. So we are still quite bullish on the business. They are doing fine.

Max Andrew Gumport: Great. And last one for me, and I will leave it there. It is just on margins for Simple Mills. So it looks like it dipped to 11% EBITDA margin in 4Q versus 16% in the first three quarters. I think also that was roughly in line with your plan. So I guess, one, is it really just all about tariffs coming on and then maybe some input costs running a bit higher too? And then could you give a bit more color on how we should think about costs for 2026, particularly given what we are seeing with almonds and inflation there? Thanks very much.

Ryals McMullian: Yeah. Max, you are spot on. It is almond flour and tariffs, and in addition to additional brand investments in the brand. I think you should expect that to continue in 2026. But, yeah, it is primarily the almond flour and tariff impact for Simple Mills.

Max Andrew Gumport: Okay. Thanks very much. Appreciate all the questions. I will pass it on.

Ryals McMullian: Okay. Thanks, Max. Thank you.

Operator: And our next question will be coming from the line of Scott Marks of Jefferies. Your line is open, Scott.

Scott Michael Marks: Hey, good morning all. Thanks for taking our questions. First one for me. You are talking about heightened reinvestment in the business and some brands for 2026. But it seems like you have also already been on this journey since the summer in terms of small loaves and some protein offerings and better-for-you. Just wondering if you can help us understand maybe what is changing and what is going to be different from what you have already been enacting in the portfolio.

Ryals McMullian: Right. Yeah. Exactly, Scott. Good question. So, as I was alluding to earlier, over the last several years, we have ramped up our brand investment, not just in marketing, but also in our innovation efforts around DKB, DKB snacks, obviously, the addition of Simple Mills, but also keto, and protein loaves, and Perfectly Crafted. I will not go on and list them all. But we believe that we are one of the most innovative producers in the category. What is different this time, as I said earlier, is when you look at our portfolio, when you look at our market share performance, the clear issue is in traditional loaf, and that primarily means Nature’s Own.

And so a lot of the additional investment and innovation that we are speaking to today is around reigniting demand for traditional loaf and for Nature’s Own.

Scott Michael Marks: Understood. Thanks for the clarity on that. And then second one for me is you are talking obviously about some of the category pressures. You also spoke a bit about some heightened competition within the category. So wondering if you can just share maybe how you are thinking about the competition. Have you seen competitors do anything like rationalize some of their own production capabilities? Just wondering how competitors are handling the current environment.

Ryals McMullian: Yeah. Nothing major that I will report in terms of bakery consolidation or anything like that. I think the competitive environment in the fourth quarter was pretty normal. No major uptick. In fact, for the category, price per unit was actually up a bit in the quarter, and a lot of that is likely a mix shift to premium products. Obviously, like the rest of the food industry, everybody is trying to figure this out: the rise of GLP-1s, the fact that it is coming out in a pill, the overall macroeconomic environment. While inflation has certainly come down, prices remain elevated and some consumers are struggling with that.

So you see a lot of move to value, not just in terms of product but also in terms of channel, moving more to club stores and mass, etc. So I think we are going to continue to see a pressured consumer for a bit longer and we will see how all that shakes out. In the meantime, what is important to us is that we are delivering products to consumers that have attributes that they want, definitely with a better-for-you bent, but also across the price spectrum. That is how we are looking at it. In terms of promotional levers, obviously, we have that at our disposal.

We tend to use that prudently and use it more for driving trial and repurchase rather than driving volume gains. You have to remember that this is a category with limited expandable consumption. And so we are very disciplined in our use of promotional activity. But where we need to do so to protect share, we will. But we will use our enhanced TPM capabilities to guide us in that process and make sure that we are achieving the desired return on investment. Scott, as an example of that, in the fourth quarter, we pulled back strategically on promotions.

As I said, there is limited expandable consumption in this category, and typically, when we get aggressive with promotions in the fourth quarter, we do not get a good return on that investment. And so if you look at the share data, you will see that we pulled back pretty substantially in the fourth quarter, and as we move into the new year and get back to a more normalized cadence.

Scott Michael Marks: Appreciate the color. We will leave it there.

Ryals McMullian: Thanks, Scott.

Operator: I am showing no further questions. I would now like to turn the conference back to Ryals McMullian, Chairman and CEO, for closing remarks.

Ryals McMullian: Okay, Tanya. Thank you. I just want to thank everybody for taking time today and joining us for questions. We very much appreciate your interest in our company. And as always, we will look forward to speaking to you again next quarter. Take care.

Operator: And this concludes today’s program. Thank you for participating. You may now disconnect.

This article is a transcript of this conference call produced for The Motley Fool. While we strive for our Foolish Best, there may be errors, omissions, or inaccuracies in this transcript. Parts of this article were created using Large Language Models (LLMs) based on The Motley Fool's insights and investing approach. It has been reviewed by our AI quality control systems. Since LLMs cannot (currently) own stocks, it has no positions in any of the stocks mentioned. As with all our articles, The Motley Fool does not assume any responsibility for your use of this content, and we strongly encourage you to do your own research, including listening to the call yourself and reading the company's SEC filings. Please see our Terms and Conditions for additional details, including our Obligatory Capitalized Disclaimers of Liability.

The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.