B&G Foods, Inc.'s
) second-quarter 2014 adjusted earnings per share of 33 cents per
share missed the Zacks Consensus Estimate of 39 cents by 15.4%.
B&G Foods Inc - Quarterly EPS (BNRI) |
Quarterly earnings remained flat year on year. Earnings remained
soft in the quarter owing to weakness in prices of the base
business, soft margins and increase in expenses. Also the
acquisitions made since May 2013 (Pirate Brands, Specialty Brands,
the Rickland Orchards brand and the TrueNorth brand) pressurized
the short term cost and efficiencies; thereby hurting earnings. The
disappointing second quarter 2014 resulted in about 2% decline in
share price on Jul 17.
Revenues and Margins
Total revenue of this packaged foods company increased 26.1% year
over year to $202.9 million as it benefited from solid sales of
some of its brands. Total revenue surpassed Zacks Consensus
Estimate of $177 million by 14.6%.
The increase in net sales was driven by solid sales of acquired
brands, Pirate Brands, Specialty Brands, the Rickland Orchards
brand and the TrueNorth brand. Other existing brands such as
Ortega, Maple Grove Farms of Vermont also performed well during the
Net sales of the company's base business increased 1.1% as the
volume increase was offset by price declines. During the quarter,
volumes of the base business increased 2.8%, whereas net price
Gross margin declined 350 basis points (bps) to 31.1% due to lower
pricing in the base business, higher distribution costs and a shift
in mix towards lower margin products.
Adjusted earnings before interest, taxes, depreciation and
amortization (EBITDA) rose 8.8% to $46.1 million during the
quarter. However, adjusted EBITDA, as a percentage of net sales,
declined 300 bps year over year to 22.7% owing to higher expenses.
Selling, general and administrative expenses as a percentage of net
sales rose 170 basis points to 12.5% due to an increase in consumer
marketing selling cost, acquisition, and warehousing expenses.
Fiscal 2014 Outlook
B&G Foods reduced its guidance for fiscal 2014 to account for
added expenses associated with its aggressive acquisition strategy.
The food company reduced full year 2014 adjusted EBITDA expectation
by 2.4% to a range of $204.0 million to $209.0 million compared to
the prior expected range of $209.0 million to $214.0 million.
Adjusted earnings per share for fiscal 2014 are expected in a range
of $1.54 to $1.60 lower than the prior guidance of $1.59 to $1.65.
B&G Foods currently has a Zacks Rank #3 (Hold).
Some better-ranked stocks in the packaged goods sector include
Treehouse Foods, Inc.
Pinnacle Foods Inc.
). While BRF and Treehouse Foods sport a Zacks Rank #1 (Strong
Buy). Pinnacle Foods holds a Zacks Rank #2 (Buy).
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B&G FOODS CL-A (BGS): Free Stock Analysis
PINNACLE FOODS (PF): Free Stock Analysis Report
BRF-BRASIL FOOD (BRFS): Free Stock Analysis
TREEHOUSE FOODS (THS): Free Stock Analysis
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