Yahoo Finance B&G Foods Inc. (BGS) Q1 2024 Earnings: Challenges Persist Amidst Strategic Adjustments
Revenue: Reported $475.2 million, down 7.1% year-over-year, exceeding estimates of $441.23 million.
Net Loss: Reported a net loss of $40.2 million compared to net income of $3.4 million in Q1 2023, significantly below the estimated net loss of $8.60 million.
Adjusted EPS: Achieved $0.18, exceeding the estimated earnings per share of $0.11.
Adjusted EBITDA: Totaled $75.0 million, a decrease of 8.9% year-over-year.
Gross Profit Margin: Improved to 23.1% of net sales from 22.4% in the previous year, despite a decrease in gross profit.
Segment Performance: Notable decline in Frozen & Vegetables segment with net sales down 16.9% primarily due to the divestiture of the Green Giant U.S. shelf-stable product line.
Future Outlook: Revised full-year net sales guidance to $1.955 billion to $1.985 billion and adjusted EPS guidance to $0.75 to $0.95.
On May 8, 2024, B&G Foods Inc. (NYSE:BGS) disclosed its financial outcomes for the first quarter of 2024, marked by significant strategic shifts and a challenging market environment. The detailed earnings report can be accessed through the company's 8-K filing.
Overview of Financial Performance
B&G Foods reported a net loss of $40.2 million for Q1 2024, a stark contrast to the net income of $3.4 million in Q1 2023. This downturn was largely due to a $70.6 million pre-tax, non-cash goodwill impairment charge within its Frozen & Vegetables segment. Adjusted net income stood at $14.4 million, down from $19.1 million year-over-year, with adjusted diluted EPS at $0.18, reflecting a decrease from the previous year's $0.27.
Net sales decreased by 7.1% to $475.2 million, down from $511.8 million in the prior year, primarily impacted by the divestiture of the Green Giant U.S. shelf-stable business and a decline in base business net sales. Adjusted EBITDA also fell by 8.9% to $75.0 million.
Segment Performance and Strategic Shifts
The company has restructured its reporting into four segments: Specialty, Meals, Frozen & Vegetables, and Spices & Flavor Solutions. Notably, the Frozen & Vegetables segment experienced a significant revenue drop of 16.9%, influenced by the divestiture of the Green Giant shelf-stable products. In response to these challenges, B&G Foods is actively exploring the divestiture of its remaining assets in this segment to sharpen its focus on core shelf-stable businesses.
President and CEO Casey Keller highlighted the strategic intent to drive low single-digit growth and reduce leverage, despite the current setbacks. The company has revised its full-year guidance for 2024, projecting net sales between $1.955 billion and $1.985 billion and adjusted EBITDA between $300 million and $320 million.
Financial Health and Market Position
Despite the current financial strain, B&G Foods is taking robust measures to stabilize its operations. The company benefits from a diverse portfolio in the consumer packaged goods sector, which remains resilient against various market shifts. However, the divestitures and the ongoing strategic reviews underscore the need for a more focused approach in a competitive market.
The company's efforts to moderate input cost inflation and manage operational expenses are reflected in the slight improvement in gross profit as a percentage of net sales, which is a critical metric for assessing efficiency in production and cost management.
As B&G Foods navigates through these transitions, the outcomes of its strategic reviews and the ability to adapt to consumer demands and market conditions will be crucial for its recovery and future growth.
For detailed insights into B&G Foods Inc.'s financial reports and strategic plans, visit their Investor Relations page.
Explore the complete 8-K earnings release (here) from B&G Foods Inc for further details.
This article first appeared on GuruFocus.
