BGS Q1 Earnings & Sales Miss Estimates Due to Weak Volumes & Pricing

B&G Foods, Inc. BGS posted first-quarter fiscal 2025 results, wherein both top and bottom lines missed the Zacks Consensus Estimate. Both net sales and earnings declined year over year.

B&G Foods faced a challenging start to the first quarter of fiscal 2025, impacted by retailer inventory reductions and the timing shift of Easter into the fiscal second quarter. However, the company has seen signs of improving sales trends in recent months. Management remains focused on stabilizing core sales, reshaping the portfolio for growth and margin expansion, accelerating cost savings and reducing leverage to enable future strategic acquisitions.

B&G Foods’ Quarterly Performance: Key Metrics and Insights

B&G Foods posted adjusted earnings of 4 cents per share, which missed the Zacks Consensus Estimate of 14 cents. Also, the bottom line slumped 77.8% from 18 cents reported in the prior-year quarter. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

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

B&G Foods, Inc. price-consensus-eps-surprise-chart | B&G Foods, Inc. Quote

Net sales declined 10.5% year over year to $425.4 million, missing the Zacks Consensus Estimate of $461 million. The decrease was caused by lower volumes, reduced net pricing and unfavorable product mix, as well as the negative impact of foreign currency exchange.

Base business net sales fell 10.5% to $425.4 million, primarily due to a volume decline of $42.4 million (8.9%), a $5.5 million (1.2%) reduction from net pricing and product mix, and a $2 million loss from unfavorable foreign currency effects.

The adjusted gross profit of $90.6 million decreased from $109.9 million in the year-ago period. The adjusted gross margin contracted 180 basis points (bps) to 21.3%.

SG&A expenses increased 1.1% to $49.1 million, due to $4.2 million in acquisition, divestiture-related, and other non-recurring costs, along with a $0.5 million rise in general and administrative expenses. These increases were partially offset by a $3.3 million decrease in consumer marketing expenses and a $0.9 million reduction in selling expenses. As a percentage of net sales, SG&A expenses increased 1.4 percentage points to 11.6%.

Adjusted EBITDA fell 21.2% to $59.1 million, largely reflecting lower net sales during the quarter and increased costs and investments in the Green Giant U.S. business.  The adjusted EBITDA margin contracted 190 bps to 13.9%.

Decoding B&G Foods’ Segmental Performance

Specialty: Net sales were $134.4 million, down 13.1% year over year. The decline was due to lower net pricing and decreased volumes.

Meals: Net sales of $106.1 million dipped 11.6% year over year due to lower volumes and a decrease in net pricing and product mix.

Frozen & Vegetables: Net sales were $93.1 million, down 11.2% year over year. The downtick was due to lower net pricing and product mix, along with a decline in volume.

Spices & Flavor Solutions: Net sales were $91.7 million, down 4% year over year due to a decline in volumes.

B&G Foods’ Financial Health Snapshot

B&G Foods exited the quarter with cash and cash equivalents of $61.2 million, net long-term debt of $2000 million and total shareholders’ equity of $513.1 million. In the fiscal first quarter ended March 29, 2025, net cash provided by operating activities was $52.7 million.

Sneak Peek Into BGS’ Outlook

For fiscal 2025, management now expects net sales in the range of $1.860 billion to $1.910 billion compared with the prior guidance of $1.890 billion to $1.950 billion. In fiscal 2024, net sales amounted to $1,932.5 million (nearly $1.93 billion).

Adjusted EBITDA is now projected to be between $280 million and $290 million, lower than the previous outlook of $290 million to $300 million and down from $295.4 million reported in fiscal 2024.

The company also revised its adjusted earnings per share (EPS) guidance for fiscal 2025 to a range of 55-65 cents, down from the earlier estimate of 65-75 cents. This compares with adjusted EPS of 70 cents in fiscal 2024.

This Zacks Rank #3 (Hold) stock has lost 16% in the past three months against the industry’s growth of 0.8%.

Three Solid Bets

United Natural Foods, Inc. UNFI distributes natural, organic, specialty, produce and conventional grocery and non-food products in the United States and Canada. At present, United Natural carries a Zacks Rank of 2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here. 

The consensus estimate for United Natural’s current fiscal-year sales and earnings implies growth of 1.9% and 485.7%, respectively, from the year-ago figures. UNFI delivered a trailing four-quarter earnings surprise of 408.7%, on average.

Mondelez International, Inc. MDLZ manufactures, markets and sells snack food and beverage products in Latin America, North America, Asia, the Middle East, Africa, and Europe. It presently carries a Zacks Rank of 2. MDLZ delivered a trailing four-quarter earnings surprise of 9.8%, on average.

The Zacks Consensus Estimate for Mondelez International’s current financial-year sales indicates growth of 4.9% from the year-ago numbers.

BRF S.A. BRFS raises, produces and slaughters poultry and pork for processing, production and sale of fresh meat, processed products, pasta, margarine, pet food and other products. It currently carries a Zacks Rank of 2. BRFS delivered a trailing four-quarter earnings surprise of 9.6%, on average.

The Zacks Consensus Estimate for BRF S.A.'s current fiscal-year sales indicates growth of 0.3% from the prior-year levels.

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