B&G Foods, Inc. BGS posted second-quarter 2024 results, wherein both net sales and earnings experienced year-over-year declines. While the bottom line matched the Zacks Consensus Estimate, the top line surpassed the same. Management pulled down its guidance for 2024.
B&G Foods is steadfast in its pursuit of enhancing organic growth and refining its portfolio, even amid short-term challenges in the demand for consumer-packaged foods. The second-quarter results met expectations, with the base business net sales showing a sequential increase from the first quarter.
Additionally, the company recently refinanced a significant portion of its long-term debt, extending maturity dates by several years to lower balance sheet risk. Additionally, B&G Foods is actively exploring potential divestitures to curtail debt, sharpen its focus on core businesses and pave the way for long-term growth.
B&G Foods, Inc. Price, Consensus and EPS Surprise
B&G Foods, Inc. price-consensus-eps-surprise-chart | B&G Foods, Inc. Quote
Quarterly Details
B&G Foods posted adjusted earnings of 8 cents per share, which came in line with the Zacks Consensus Estimate. Also, the bottom line declined 46.7% year over year.
Net sales of $444.6 million declined 5.3% year over year, mainly due to the divestiture of the Green Giant U.S. shelf-stable product line (divested on Nov 8, 2023), reduced unit volumes, lower net pricing and effects of product mix. However, net sales surpassed the Zacks Consensus Estimate of $435 million.
Base business net sales declined 2.5% to $444.6 million due to lower net pricing, an adverse product mix, reduced unit volumes and currency headwinds.
The adjusted gross profit of $93.2 million decreased from $102.7 million in the year-ago period. The adjusted gross margin contracted 90 basis points (bps) to 21%.
SG&A expenses declined 9.9% to $43.1 million due to lower consumer marketing costs, reduced warehousing expenses and lower selling costs, partly offset by elevated general and administrative expenses. As a percentage of net sales, SG&A expenses fell 0.5 percentage points to 9.7%.
Adjusted EBITDA fell 6.6% to $63.9 million due to lower base business net sales and the impact of the Green Giant U.S. shelf-stable divestiture. The adjusted EBITDA margin contracted 20 bps to 14.4%.
Segment Details
Specialty: Net sales came in at $146.6 million, down 4.7% year over year. The decline was primarily due to the lower pricing of Crisco as well as lower overall volumes.
Meals: Net sales of $107.9 million dipped 5.5% year over year due to lower volumes, partly made up by elevated net pricing.
Frozen & Vegetables: Net sales came in at $91.6 million, down 15% 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 $98.5 million, up 4.9% year over year on improved volumes.
Other Updates & Guidance
B&G Foods ended the quarter with cash and cash equivalents of $40.3 million, net long-term debt of $1,779 million and total shareholders’ equity of nearly $765 million.
For fiscal 2024, management now anticipates net sales in the band of $1.945-$1.970 billion compared with the earlier view 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-$315 million now compared with $300-$320 million projected earlier. The company recorded an adjusted EBITDA of $318 million in fiscal 2023.
Adjusted earnings per share (EPS) for fiscal 2024 are envisioned to be between 70 and 90 cents, lower than the earlier guidance range of 75-95 cents. In fiscal 2023, the company posted an adjusted EPS of 99 cents.
Shares of this Zacks Rank #4 (Sell) company have tumbled 25% in the past three months compared with the industry’s decline of 3.9%
Better-Ranked Staple Bets
Vital Farms VITL offers a range of produced pasture-raised foods. It currently sports a Zacks Rank #1 (Strong Buy). VITL has a trailing four-quarter earnings surprise of 102.1%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate Vital Farms’ current financial-year sales and EPS indicate growth of 24.9% and 66.1%, respectively, from the year-ago reported numbers.
Philip Morris PM, a tobacco company, has a trailing four-quarter earnings surprise of 1.8%, on average. PM currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for Philip Morris’ current financial-year sales and earnings indicates growth of 5.8% and almost 7%, respectively, from the prior-year reported levels.
Colgate-Palmolive CL, which manufactures and sells consumer products, currently carries a Zacks Rank #2. CL delivered an earnings surprise of 4.8% in the trailing four quarters, on average.
The Zacks Consensus Estimate for Colgate-Palmolive’s current fiscal-year sales and earnings suggests growth of 3.8% and nearly 10.5%, respectively, from the year-ago reported numbers.
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Today, See These 5 Potential Home Runs >>Philip Morris International Inc. (PM) : Free Stock Analysis Report
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B&G Foods, Inc. (BGS) : Free Stock Analysis Report
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