Flowers Foods (NYSE:FLO) shares fell more than 6% since the company’s reported Q3 results on Thursday, with EPS of $0.30 coming in better than the Street estimate of $0.29. Revenue was $1.16 billion, compared to the Street estimate of $1.14 billion.

In spite of the beat, the level of gross margin degradation (-285 bps year-over-year) due to ingredient/packaging costs was a point of concern, despite nearly +18pts of price/mix benefit to sales.

The company expects Q4 revenue of $4.807-4.85 billion, compared to the Street estimate of $4.8 billion. The company raised the low end of its fiscal 2022 sales growth guidance but maintained its EPS range, reflective of the higher costs and a slight reduction in its cost savings target for 2022.