We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Can B&G Foods Achieve 20% Adjusted EBITDA Margin by Year-End?
Read MoreHide Full Article
Key Takeaways
B&G Foods posted a 13.7% adjusted EBITDA margin in Q2, pressured by frozen foods and tariffs.
The company expects $10M incremental adjusted EBITDA in 2H 2025 from cost and productivity gains.
U.S. frozen vegetables are projected to add $8M-$10M in 2H in adjusted EBITDA from crop and FX improvements.
B&G Foods, Inc. ((BGS - Free Report) ) has set a strategic objective - driving adjusted EBITDA margins to 20% by fiscal year-end 2025. This reflects an aggressive shift toward operational efficiency and a more streamlined business structure. In the second quarter of fiscal 2025, the company posted a 13.7% adjusted EBITDA margin, affected by temporary cost pressures in the frozen and vegetables segment and elevated tariff expenses.
Management expects a turnaround in the second half of fiscal 2025, banking on improved crop costs, favorable foreign exchange dynamics and productivity enhancements to generate $10 million in incremental adjusted EBITDA in the fiscal third and fourth quarters. These savings efforts are on track to deliver an annual run rate of approximately $15 million to $20 million, driven by additional productivity in cost of goods sold, trade and market spending efficiencies, accelerated SG&A savings and discretionary spending cuts.
Importantly, the U.S. frozen vegetables segment is forecasted to swing into profitability, with an expected $8 million to $10 million increase in segment adjusted EBITDA compared with last year. This improvement is driven by more favorable crop costs, foreign exchange benefits on the Green Giant business manufactured in Mexico and strong productivity gains at the Irapuato manufacturing facility.
Despite these optimistic drivers, risks remain. The largest wildcard is the tariff exposure, particularly in the Spices and Flavor Solutions unit, which accounted for approximately $1 million of the second quarter adjusted EBITDA headwinds. Currency volatility also continues to pose potential margin pressures.
Ultimately, achieving a 20% adjusted EBITDA margin will depend on the realization of cost-cutting measures, execution of planned divestitures and stabilization of volatile input costs. The company’s strategic initiatives provide a clear path toward this target, but disciplined execution in the second half of fiscal 2025 will be important to progress toward the goal.
B&G Foods’ Zacks Rank & Share Price Performance
Shares of this Zacks Rank #4 (Sell) company have risen 7% over the past three months, outperforming both the industry and the broader Consumer Staples sector, which declined 3.4% and 2.9%, respectively. However, BGS underperformed the S&P 500, which gained 12.2% over the same period.
BGS Stock's Past Three Months Performance
Image Source: Zacks Investment Research
Is BGS a Value Play Stock?
B&G Foods currently trades at a forward 12-month P/E ratio of 7.84, which is down from the industry average of 15.38 and notably below the sector average of 15.3. This valuation positions the stock at a modest discount relative to both its direct peers and the broader consumer staples sector.
BGS P/E Ratio (Forward 12 Months)
Image Source: Zacks Investment Research
Stocks to Consider
The Chefs' Warehouse, Inc. ((CHEF - Free Report) ) distributes specialty food and center-of-the-plate products in the United States, the Middle East and Canada. It currently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for The Chefs' Warehouse’s current fiscal-year sales and earnings indicates growth of 6.6% and 19.1%, respectively, from the prior-year levels. CHEF delivered a trailing four-quarter earnings surprise of 11.3%, on average.
Celsius Holdings, Inc. ((CELH - Free Report) ) develops, processes, manufactures, markets, sells and distributes functional energy drinks. It flaunts a Zacks Rank #1 at present. CELH delivered a trailing four-quarter earnings surprise of 5.4%, on average.
The Zacks Consensus Estimate for Celsius Holdings’ current fiscal-year sales and earnings indicates growth of 77.7% and 54.3%, respectively, from the prior-year levels.
Laird Superfood, Inc. ((LSF - Free Report) ) manufactures and markets plant-based, natural and functional food in the United States. It has a Zacks Rank # 2 (Buy) at present. LSF delivered a trailing four-quarter earnings surprise of 11.3%, on average.
The Zacks Consensus Estimate for Laird Superfood’s current fiscal-year sales and earnings indicates growth of 21% and 23.8%, respectively, from the prior-year levels.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Shutterstock
Can B&G Foods Achieve 20% Adjusted EBITDA Margin by Year-End?
Key Takeaways
B&G Foods, Inc. ((BGS - Free Report) ) has set a strategic objective - driving adjusted EBITDA margins to 20% by fiscal year-end 2025. This reflects an aggressive shift toward operational efficiency and a more streamlined business structure. In the second quarter of fiscal 2025, the company posted a 13.7% adjusted EBITDA margin, affected by temporary cost pressures in the frozen and vegetables segment and elevated tariff expenses.
Management expects a turnaround in the second half of fiscal 2025, banking on improved crop costs, favorable foreign exchange dynamics and productivity enhancements to generate $10 million in incremental adjusted EBITDA in the fiscal third and fourth quarters. These savings efforts are on track to deliver an annual run rate of approximately $15 million to $20 million, driven by additional productivity in cost of goods sold, trade and market spending efficiencies, accelerated SG&A savings and discretionary spending cuts.
Importantly, the U.S. frozen vegetables segment is forecasted to swing into profitability, with an expected $8 million to $10 million increase in segment adjusted EBITDA compared with last year. This improvement is driven by more favorable crop costs, foreign exchange benefits on the Green Giant business manufactured in Mexico and strong productivity gains at the Irapuato manufacturing facility.
Despite these optimistic drivers, risks remain. The largest wildcard is the tariff exposure, particularly in the Spices and Flavor Solutions unit, which accounted for approximately $1 million of the second quarter adjusted EBITDA headwinds. Currency volatility also continues to pose potential margin pressures.
Ultimately, achieving a 20% adjusted EBITDA margin will depend on the realization of cost-cutting measures, execution of planned divestitures and stabilization of volatile input costs. The company’s strategic initiatives provide a clear path toward this target, but disciplined execution in the second half of fiscal 2025 will be important to progress toward the goal.
B&G Foods’ Zacks Rank & Share Price Performance
Shares of this Zacks Rank #4 (Sell) company have risen 7% over the past three months, outperforming both the industry and the broader Consumer Staples sector, which declined 3.4% and 2.9%, respectively. However, BGS underperformed the S&P 500, which gained 12.2% over the same period.
BGS Stock's Past Three Months Performance
Image Source: Zacks Investment Research
Is BGS a Value Play Stock?
B&G Foods currently trades at a forward 12-month P/E ratio of 7.84, which is down from the industry average of 15.38 and notably below the sector average of 15.3. This valuation positions the stock at a modest discount relative to both its direct peers and the broader consumer staples sector.
BGS P/E Ratio (Forward 12 Months)
Image Source: Zacks Investment Research
Stocks to Consider
The Chefs' Warehouse, Inc. ((CHEF - Free Report) ) distributes specialty food and center-of-the-plate products in the United States, the Middle East and Canada. It currently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for The Chefs' Warehouse’s current fiscal-year sales and earnings indicates growth of 6.6% and 19.1%, respectively, from the prior-year levels. CHEF delivered a trailing four-quarter earnings surprise of 11.3%, on average.
Celsius Holdings, Inc. ((CELH - Free Report) ) develops, processes, manufactures, markets, sells and distributes functional energy drinks. It flaunts a Zacks Rank #1 at present. CELH delivered a trailing four-quarter earnings surprise of 5.4%, on average.
The Zacks Consensus Estimate for Celsius Holdings’ current fiscal-year sales and earnings indicates growth of 77.7% and 54.3%, respectively, from the prior-year levels.
Laird Superfood, Inc. ((LSF - Free Report) ) manufactures and markets plant-based, natural and functional food in the United States. It has a Zacks Rank # 2 (Buy) at present. LSF delivered a trailing four-quarter earnings surprise of 11.3%, on average.
The Zacks Consensus Estimate for Laird Superfood’s current fiscal-year sales and earnings indicates growth of 21% and 23.8%, respectively, from the prior-year levels.