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Why Is B&G Foods (BGS) Up 0.4% Since Last Earnings Report?
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It has been about a month since the last earnings report for B&G Foods (BGS - Free Report) . Shares have added about 0.4% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is B&G Foods due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
B&G Foods Q4 Earnings Top Estimates, Sales Decline Y/Y
B&G Foods posted fourth-quarter 2023 results, wherein the top and bottom lines declined year over year, while both metrics beat the Zacks Consensus Estimate.
Nonetheless, management stated that results reflected solid progress, including better margins, stabilizing volumes, greater cash flows and reduced leverage. Further, the company concluded the sale of Green Giant U.S. canned vegetables during the quarter to strengthen its future portfolio.
B&G Foods posted adjusted earnings of 30 cents per share, which beat the Zacks Consensus Estimate of 28 cents. However, the bottom line slumped 25% year over year.
Net sales of $578.1 million declined 7.2% year over year, mainly due to lower unit volumes stemming from the divestitures of the Green Giant U.S. shelf-stable product line (divested on Nov 8, 2023) and Back to Nature (sold on Jan 3, 2023). Also, lower net pricing and foreign currency headwinds weighed on net sales. However, the top line came ahead of the Zacks Consensus Estimate of $573 million.
Base business net sales declined 2.3% to $562.3 million due to lower net pricing, an adverse product mix and currency headwinds, partly made up by higher unit volumes.
Net sales of spices & seasonings, Clabber Girl and Maple Grove Farms rose 0.8%, 26.3%, and 3.4%, respectively. However, net sales of Green Giant (including Le Sueur and excluding Green Giant U.S. shelf-stable product line), Crisco, Ortega and Cream of Wheat declined by 4.4%, 8.7%, 1% and 9%, respectively. Base net sales of all the other brands in the aggregate fell 3.5%.
The adjusted gross profit of $126.8 million decreased from $128.6 million in the year-ago period. The adjusted gross margin expanded 130 basis points (bps) to 21.9%. The gross margin expansion was backed by increased net pricing (relative to input costs), reduced transportation and warehousing costs, moderation of input cost inflation and reduced depreciation expenses.
SG&A expenses escalated 2.7% to $53.2 million due to higher general and administrative expenses and consumer marketing costs, somewhat negated by a decline in warehousing expenses, selling costs and acquisition/divestiture-related and non-recurring expenses. As a percentage of net sales, SG&A expenses climbed 0.9 percentage points to 9.2%.
Adjusted EBITDA fell 7.3% to $86.8 million due to the divestitures. The adjusted EBITDA margin remained flat year over year at 15%. Our model suggested a 14% decline in adjusted EBITDA and a 100-bps contraction in the adjusted EBITDA margin.
Other Updates
B&G Foods ended the quarter with cash and cash equivalents of $41.1 million, net long-term debt of $2,023.1 million and total shareholders’ equity of $835.5 million.
A day prior to the earnings release, management announced a quarterly cash dividend of 19 cents per share, payable on Apr 30, 2024 to shareholders of record as of Mar 28.
Guidance
For fiscal 2024, management anticipates net sales in the band of $1.975-$2.02 billion. In fiscal 2022, net sales amounted to $2,062.3 million ($2.06 billion).
The company anticipates adjusted EBITDA in the range of around $305-$325 million, whereas it recorded $318 million in fiscal 2023.
Adjusted earnings per share (EPS) for fiscal 2024 are envisioned between 80 cents and $1.00. In fiscal 2023, the company posted an adjusted EPS of 99 cents.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
The consensus estimate has shifted -6.82% due to these changes.
VGM Scores
At this time, B&G Foods has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision indicates a downward shift. It comes with little surprise B&G Foods has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
B&G Foods is part of the Zacks Food - Miscellaneous industry. Over the past month, Kraft Heinz (KHC - Free Report) , a stock from the same industry, has gained 2.8%. The company reported its results for the quarter ended December 2023 more than a month ago.
Kraft Heinz reported revenues of $6.86 billion in the last reported quarter, representing a year-over-year change of -7.1%. EPS of $0.78 for the same period compares with $0.85 a year ago.
Kraft Heinz is expected to post earnings of $0.68 per share for the current quarter, representing no change from the year-ago quarter. Over the last 30 days, the Zacks Consensus Estimate has changed -0.2%.
Kraft Heinz has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.
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Why Is B&G Foods (BGS) Up 0.4% Since Last Earnings Report?
It has been about a month since the last earnings report for B&G Foods (BGS - Free Report) . Shares have added about 0.4% in that time frame, underperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is B&G Foods due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at the most recent earnings report in order to get a better handle on the important drivers.
B&G Foods Q4 Earnings Top Estimates, Sales Decline Y/Y
B&G Foods posted fourth-quarter 2023 results, wherein the top and bottom lines declined year over year, while both metrics beat the Zacks Consensus Estimate.
Nonetheless, management stated that results reflected solid progress, including better margins, stabilizing volumes, greater cash flows and reduced leverage. Further, the company concluded the sale of Green Giant U.S. canned vegetables during the quarter to strengthen its future portfolio.
B&G Foods posted adjusted earnings of 30 cents per share, which beat the Zacks Consensus Estimate of 28 cents. However, the bottom line slumped 25% year over year.
Net sales of $578.1 million declined 7.2% year over year, mainly due to lower unit volumes stemming from the divestitures of the Green Giant U.S. shelf-stable product line (divested on Nov 8, 2023) and Back to Nature (sold on Jan 3, 2023). Also, lower net pricing and foreign currency headwinds weighed on net sales. However, the top line came ahead of the Zacks Consensus Estimate of $573 million.
Base business net sales declined 2.3% to $562.3 million due to lower net pricing, an adverse product mix and currency headwinds, partly made up by higher unit volumes.
Net sales of spices & seasonings, Clabber Girl and Maple Grove Farms rose 0.8%, 26.3%, and 3.4%, respectively. However, net sales of Green Giant (including Le Sueur and excluding Green Giant U.S. shelf-stable product line), Crisco, Ortega and Cream of Wheat declined by 4.4%, 8.7%, 1% and 9%, respectively. Base net sales of all the other brands in the aggregate fell 3.5%.
The adjusted gross profit of $126.8 million decreased from $128.6 million in the year-ago period. The adjusted gross margin expanded 130 basis points (bps) to 21.9%. The gross margin expansion was backed by increased net pricing (relative to input costs), reduced transportation and warehousing costs, moderation of input cost inflation and reduced depreciation expenses.
SG&A expenses escalated 2.7% to $53.2 million due to higher general and administrative expenses and consumer marketing costs, somewhat negated by a decline in warehousing expenses, selling costs and acquisition/divestiture-related and non-recurring expenses. As a percentage of net sales, SG&A expenses climbed 0.9 percentage points to 9.2%.
Adjusted EBITDA fell 7.3% to $86.8 million due to the divestitures. The adjusted EBITDA margin remained flat year over year at 15%. Our model suggested a 14% decline in adjusted EBITDA and a 100-bps contraction in the adjusted EBITDA margin.
Other Updates
B&G Foods ended the quarter with cash and cash equivalents of $41.1 million, net long-term debt of $2,023.1 million and total shareholders’ equity of $835.5 million.
A day prior to the earnings release, management announced a quarterly cash dividend of 19 cents per share, payable on Apr 30, 2024 to shareholders of record as of Mar 28.
Guidance
For fiscal 2024, management anticipates net sales in the band of $1.975-$2.02 billion. In fiscal 2022, net sales amounted to $2,062.3 million ($2.06 billion).
The company anticipates adjusted EBITDA in the range of around $305-$325 million, whereas it recorded $318 million in fiscal 2023.
Adjusted earnings per share (EPS) for fiscal 2024 are envisioned between 80 cents and $1.00. In fiscal 2023, the company posted an adjusted EPS of 99 cents.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in fresh estimates.
The consensus estimate has shifted -6.82% due to these changes.
VGM Scores
At this time, B&G Foods has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. However, the stock was allocated a grade of A on the value side, putting it in the top 20% for this investment strategy.
Overall, the stock has an aggregate VGM Score of A. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been trending upward for the stock, and the magnitude of this revision indicates a downward shift. It comes with little surprise B&G Foods has a Zacks Rank #2 (Buy). We expect an above average return from the stock in the next few months.
Performance of an Industry Player
B&G Foods is part of the Zacks Food - Miscellaneous industry. Over the past month, Kraft Heinz (KHC - Free Report) , a stock from the same industry, has gained 2.8%. The company reported its results for the quarter ended December 2023 more than a month ago.
Kraft Heinz reported revenues of $6.86 billion in the last reported quarter, representing a year-over-year change of -7.1%. EPS of $0.78 for the same period compares with $0.85 a year ago.
Kraft Heinz is expected to post earnings of $0.68 per share for the current quarter, representing no change from the year-ago quarter. Over the last 30 days, the Zacks Consensus Estimate has changed -0.2%.
Kraft Heinz has a Zacks Rank #3 (Hold) based on the overall direction and magnitude of estimate revisions. Additionally, the stock has a VGM Score of C.