Advertisement
Singapore markets open in 8 hours 40 minutes

  • Straits Times Index

    3,314.05
    +0.57 (+0.02%)
     

  • S&P 500

    5,319.67
    +16.40 (+0.31%)
     

  • Dow

    40,001.33
    -2.26 (-0.01%)
     

  • Nasdaq

    16,796.39
    +110.42 (+0.66%)
     

  • Bitcoin USD

    67,545.11
    +682.99 (+1.02%)
     

  • CMC Crypto 200

    1,379.57
    +25.15 (+1.86%)
     

  • FTSE 100

    8,424.20
    +3.94 (+0.05%)
     

  • Gold

    2,429.80
    +12.40 (+0.51%)
     

  • Crude Oil

    79.81
    -0.25 (-0.31%)
     

  • 10-Yr Bond

    4.4430
    +0.0230 (+0.52%)
     

  • Nikkei

    39,069.68
    +282.30 (+0.73%)
     

  • Hang Seng

    19,636.22
    +82.61 (+0.42%)
     

  • FTSE Bursa Malaysia

    1,627.50
    +10.88 (+0.67%)
     

  • Jakarta Composite Index

    7,266.69
    -50.55 (-0.69%)
     

  • PSE Index

    6,682.78
    +64.09 (+0.97%)
     

B&G Foods Inc (BGS) Q1 2024 Earnings Call Transcript Highlights: Navigating Challenges and ...

GuruFocus Research
·4-min read

  • Net Sales: $475.2 million

  • Adjusted EBITDA: $75 million

  • Adjusted EBITDA Margin: 15.8%

  • Adjusted Diluted EPS: $0.18

  • Gross Profit: $108.9 million

  • Adjusted Gross Profit: $109.9 million (23.1% of net sales)

  • Net Loss: $40.2 million

  • Adjusted Net Income: $14.4 million

Release Date: May 08, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

  • B&G Foods Inc (NYSE:BGS) reported a consistent adjusted EBITDA margin of 15.8%, maintaining stability compared to the previous year.

  • The company saw a 60 basis point increase in gross profit as a percentage of net sales compared to last year, indicating improved profitability.

  • B&G Foods Inc (NYSE:BGS) has successfully reorganized into four distinct business units, enhancing operational visibility and focus.

  • The divestiture of the Green Giant U.S. canned vegetable business and other assets is expected to sharpen the company's focus and improve margins and cash flow.

  • B&G Foods Inc (NYSE:BGS) is actively managing a lean corporate structure, maintaining operational efficiency with corporate costs at only 4-5% of net sales.

Negative Points

  • First quarter net sales and adjusted EBITDA were slightly below expectations, with net sales down approximately $17 million or 3.4% year-over-year.

  • The food service and industrial segments experienced significant declines, reflecting a slowdown in out-of-home traffic and volumes.

  • Increased general and administrative costs, including insurance and salary wages, contributed to a rise in SG&A expenses by 1.9 million or 4%.

  • The company reported a net loss of $40.2 million for the first quarter, driven by a write-down of goodwill allocated to the frozen and vegetable business unit.

  • B&G Foods Inc (NYSE:BGS) is facing challenges in the frozen vegetable category, with overall softness leading to a strategic review and potential divestiture of the frozen vegetable business unit.

Q & A Highlights

Q: What percentage does foodservice represent of total sales? A: (Casey Keller - President, Chief Executive Officer) Foodservice represents about 14% of total sales on average per quarter.

ADVERTISEMENT

Q: Can you share the sales or EBITDA of the remaining frozen and canned veggie businesses in the US and Canada that are under evaluation? A: (Bruce Wacha - Chief Financial Officer, Executive Vice President - Finance) The frozen vegetables business unit, which is under strategic review, has annual net sales of just under $400 million. Specific EBITDA figures have not been disclosed as the company is reporting segment profits on a quarterly basis.

Q: How does the potential divestiture of the frozen and vegetable segment fit into the broader portfolio strategy? A: (Casey Keller - President, Chief Executive Officer) The potential divestiture aligns with B&G Foods' strategy to focus on areas with strong growth potential and capabilities. The frozen vegetable category, although on-trend, may not align with the company's core capabilities and focus moving forward.

Q: What impact has the increase in promotional trade spend had on volumes and pricing? A: (Casey Keller - President, Chief Executive Officer) The increase in promotional trade spend is partly due to a more competitive promotion environment and is gradually returning to pre-pandemic levels. This strategy is used to manage price gaps, particularly in categories like Green Giant frozen vegetables and Crisco, to maintain competitive pricing against private labels.

Q: What are the expectations for foodservice trends and their impact on future sales? A: (Casey Keller - President, Chief Executive Officer) Foodservice trends are expected to remain soft throughout the year, which may continue to impact sales negatively. However, there is an expectation of a pickup in at-home consumption in the latter half of the year, which could offset some of the declines.

Q: Can you provide more details on the timing and process of the strategic review for the frozen vegetable business? A: (AJ Schwabe - Associate and Corporate Strategy Investor development) The timing and specifics of the strategic review process are not disclosed as M&A activities are unpredictable. The company is evaluating its options and will update stakeholders as appropriate.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

This article first appeared on GuruFocus.