News

B&G Foods, Inc. BGS came up with first-quarter 2024 results, wherein the top and bottom lines missed the Zacks Consensus Estimate. Both net sales and earnings experienced year-over-year declines.

The sales decline was due to foodservice trends and increased promotion spending. Nonetheless, management stated that the company witnessed consistent margins, moderate inflation, stabilizing volumes and reduced leverage.

Q1 Details

B&G Foods posted adjusted earnings of 18 cents per share, which missed the Zacks Consensus Estimate of 20 cents. Also, the bottom line slumped 33.3% year over year.

Net sales of $475.2 million declined 7.1% year over year mainly due to lower unit volumes stemming from the divestiture of the Green Giant U.S. shelf-stable product line (divested on Nov 8, 2023). Also, lower net pricing and effects of product mix weighed on net sales. Net sales missed the Zacks Consensus Estimate of $483 million.

Base business net sales declined 4.4% to $475.3 million due to lower net pricing, an adverse product mix and lower unit volumes partly made up by positive impacts of currency headwinds.

The adjusted gross profit of $109.9 million decreased from $114.9 million in the year-ago period. The adjusted gross margin expanded 70 basis points (bps) to 23.1%. The gross margin decline was backed by reduced transportation and warehousing costs, moderation of input cost inflation and reduced depreciation expenses.

SG&A expenses escalated 4% to $48.6 million due to higher general and administrative expenses, consumer marketing costs, acquisition/divestiture related cost and non-recurring expenses somewhat offset by a decline in warehousing expenses and selling costs. As a percentage of net sales, SG&A expenses climbed 1.1 percentage points to 10.2%.

Adjusted EBITDA fell 8.9% to $75 million due lower base business net sales and the impact of the Green Giant U.S. shelf-stable divestiture. The adjusted EBITDA margin contracted 30 bps to 15.8%.

B&G Foods, Inc. Price, Consensus and EPS Surprise

Segment Details

Specialty: Net sales came in at $154.8 million, down 4.9% year over year. The decline was primarily due to lower pricing of Crisco as well as lower foodservice and industrial net sales.

Meals: Net sales of $120 million dipped 1.6% year over year, thanks lower net sales in foodservice.

Frozen & Vegetables: Net sales came in at $104.9 million, down 16.9% year over year. The downtick was due to the divestiture of Green Giant U.S. shelf-stable products, a decrease in volume, increased spending on promotional trade activities and changes in product mix within the frozen category.

Spices & Flavor Solutions: Net sales came in at $95.6 million, down 5.4% year over year due to lower net sales in food service.

Other Updates

B&G Foods ended the quarter with cash and cash equivalents of $42.5 million, net long-term debt of $2,014.2 million and total shareholders’ equity of $781.2 million.

Additionally, the company unveiled its intentions continue and speed up the restructuring of its portfolio, aiming to enhance focus, bolster margins and cash flow and optimize future value generation. As previously mentioned, the company has been assessing potential divestitures that form about 10-15% of its consolidated net sales.

Outlook

For fiscal 2024, management anticipates net sales in the band of $1.955-$1.985 billion. In fiscal 2023, net sales amounted to $2,062.3 million ($2.06 billion).

The company anticipates adjusted EBITDA in the range of around $300-$320 million, whereas it recorded $318 million in fiscal 2023.

Adjusted earnings per share (EPS) for fiscal 2024 are envisioned to be between 75 cents and $95 cents. In fiscal 2023, the company posted adjusted EPS of 99 cents.

BGS shares have increased 4.5% in the past six months compared with the industry’s growth of 8.2%

Image Source: Zacks Investment Research

Stocks to Consider

B&G Foods currently carries a Zacks Rank of 4 (Sell).

Here, we have highlighted three better-ranked stocks, namely and Vita Coco Company COCO, Colgate-Palmolive CL and Hormel Foods HRL.

Vita Coco Company, which develops, markets and distributes coconut water products, currently sports a Zacks Rank #1 (Strong Buy). COCO has a trailing four-quarter earnings surprise of 25.3%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for Vita Coco Company’s current financial-year sales and earnings suggests growth of 2.7% and 19.2%, respectively, from the year-ago reported numbers.

Colgate-Palmolive, which manufactures and sells consumer products, currently carries a Zacks Rank #2 (Buy). CL delivered an earnings surprise of 4.4% in the trailing four quarters, on average.

The Zacks Consensus Estimate for Colgate-Palmolive’s current fiscal-year sales and earnings suggests growth of 4.2% and nearly 13%, respectively, from the year-ago reported numbers.

Hormel Foods develops, processes and distributes various meat, nuts and other food products. It currently carries a Zacks Rank #2. HRL has a trailing four-quarter earnings surprise of 3.5%, on average.

The Zacks Consensus Estimate for Hormel Foods’ current financial-year sales suggests growth of 0.3% from the year-ago reported number.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.