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.
BGS Q3 Earnings Top Estimates as Volumes and Margins Improve
Read MoreHide Full Article
Key Takeaways
BGS Q3 adjusted EPS jumped 40% to 21 cents, while net sales rose 4.7% to $459.8 million.
B&G Foods' adjusted EBITDA grew 16.2% to $81.8 million, with gross margin expanding 170 basis points.
BGS raised its 2026 sales outlook to $1.76-$1.80 billion and EBITDA forecast to $280-$290 million.
B&G Foods, Inc. (BGS - Free Report) delivered a strong performance in the third quarter of fiscal 2026, benefiting from higher volumes, favorable portfolio changes and improved operating efficiency. The company also raised its full-year sales and adjusted EBITDA outlook.
B&G Foods posted adjusted earnings of 21 cents per share, surpassing the Zacks Consensus Estimate of 15 cents. The bottom line increased 40% from 15 cents in the year-ago quarter. Net sales rose 4.7% year over year to $459.8 million, supported by 5% growth in base business net sales.
BGS Benefits From Volume Growth and Portfolio Changes
Base business net sales increased $19.4 million to $404.6 million. Higher volumes contributed $23.6 million, representing 6.1% growth, partially offset by a $3.3 million decline from net pricing and product mix and a $0.9 million foreign currency headwind.
The College Inn and Kitchen Basics acquisition contributed $29 million in sales, while the Green Giant U.S. frozen co-manufacturing agreement generated $26.3 million. These contributions more than offset the absence of $54.1 million in prior-year sales from the divested Green Giant U.S. frozen and Le Sueur U.S. businesses.
For the first three quarters of fiscal 2026, base business net sales grew 1.8% to $1,116 million, primarily supported by higher volumes.
Specialty segment revenues increased 8.3% year over year to $163 million, primarily driven by higher institutional bulk vegetable oil sales and increased Grandma's Molasses volumes. However, segment adjusted EBITDA declined 10.2% to $33.9 million due to higher oil input and transportation costs.
Meals segment revenues rose 27.9% to $140.6 million, largely benefiting from the College Inn and Kitchen Basics acquisition. Excluding acquisition contributions, sales grew 1.5%. Segment adjusted EBITDA increased 24.7% to $29.8 million.
Spices & Flavor Solutions revenues edged up 0.3% to $101.7 million, aided by private-label and foodservice growth and moderate pricing gains. Segment adjusted EBITDA advanced 24.1% to $32.7 million, reflecting improved pricing, lower tariff expenses and reduced operating costs.
Frozen & Vegetables revenues decreased 29.6% to $54.5 million, primarily due to divestitures. Nevertheless, segment adjusted EBITDA increased 37.3% to $5.7 million, benefiting from the Green Giant U.S. frozen divestiture and co-manufacturing arrangement.
BGS Sees Margin Expansion Amid Cost Pressures
Adjusted gross profit increased to $111.2 million from $98.8 million a year ago. Adjusted gross margin expanded 170 basis points to 24.2%, reflecting the acquisition of higher-margin brands, the divestiture of lower-margin operations and reduced tariff expenses.
Adjusted EBITDA increased 16.2% year over year to $81.8 million, while the adjusted EBITDA margin expanded 180 basis points to 17.8%.
Selling, general and administrative expenses rose 14.9% to $51.3 million, primarily due to higher acquisition, divestiture-related and nonrecurring expenses. Excluding these items, SG&A expenses represented 8.9% of sales, down from 9.6% a year earlier.
Net interest expense increased 20.1% to $44.8 million, reflecting higher average debt and borrowing costs.
B&G Foods Focuses on Cash Generation and Deleveraging
The company reported adjusted net income of $17.8 million, up 51.3% year over year. However, GAAP results reflected a net loss of $32.5 million compared with a loss of $19.1 million a year earlier, primarily due to a $40.7 million noncash impairment charge related to the B&M and Joan of Arc brands.
Operating activities used $28.5 million in cash during the quarter compared with $64.6 million in the prior-year period.
Management remains focused on improving cash conversion and reducing leverage. The consolidated leverage ratio stood slightly above 6.4 times, with the company targeting a reduction below 6 times by mid-2027 and below 5.5 times over the longer term.
BGS Raises Fiscal 2026 Sales and EBITDA Outlook
B&G Foods increased its fiscal 2026 net sales guidance to $1,760-$1,800 million and adjusted EBITDA guidance to $280-$290 million. The company reaffirmed its adjusted earnings outlook of 57.5-67.5 cents per share.
Management expects an adjusted EBITDA margin of approximately 15.9-16.1%.
B&G Foods Targets Productivity and Operating Gains
The company is targeting annual incremental productivity improvements equivalent to approximately 3% of the cost of goods sold, emphasizing procurement, manufacturing efficiency, logistics and operational simplification.
Looking ahead to fiscal 2027, management anticipates continued inflationary pressures from diesel fuel, transportation and soybean oil. However, productivity initiatives and incremental benefits from recently completed transactions are expected to help offset these headwinds.
The Zacks Rank #3 (Hold) stock has tumbled 43% over the past year compared with the industry’s decline of 11.2%.
The Zacks Consensus Estimate for Lamb Weston’s current fiscal-year EPS implies growth of 7.6% from the year-ago figure. LW delivered a trailing four-quarter earnings surprise of 22.1%, on average.
The J.M. Smucker Company (SJM - Free Report) , a leading manufacturer and marketer of branded food, beverage, pet food and pet snack products, currently carries a Zacks Rank #2 (Buy). SJM delivered a trailing four-quarter earnings surprise of 13.8%, on average.
The Zacks Consensus Estimate for The J.M. Smucker’s current fiscal-year EPS implies growth of 17.1% from the year-ago figure.
Altria Group, Inc. (MO - Free Report) , a leading U.S. tobacco and nicotine company, currently carries a Zacks Rank of 2. MO delivered a trailing four-quarter earnings surprise of 1.3%, on average.
The Zacks Consensus Estimate for Altria Group’s current fiscal-year sales and EPS indicates an increase of 3% and 5.2%, respectively, from the year-ago period.
View the Zacks #1 Rank List
Image: Shutterstock
BGS Q3 Earnings Top Estimates as Volumes and Margins Improve
Key Takeaways
B&G Foods, Inc. (BGS - Free Report) delivered a strong performance in the third quarter of fiscal 2026, benefiting from higher volumes, favorable portfolio changes and improved operating efficiency. The company also raised its full-year sales and adjusted EBITDA outlook.
B&G Foods posted adjusted earnings of 21 cents per share, surpassing the Zacks Consensus Estimate of 15 cents. The bottom line increased 40% from 15 cents in the year-ago quarter. Net sales rose 4.7% year over year to $459.8 million, supported by 5% growth in base business net sales.
B&G Foods, Inc. Price, Consensus and EPS Surprise
B&G Foods, Inc. price-consensus-eps-surprise-chart | B&G Foods, Inc. Quote
BGS Benefits From Volume Growth and Portfolio Changes
Base business net sales increased $19.4 million to $404.6 million. Higher volumes contributed $23.6 million, representing 6.1% growth, partially offset by a $3.3 million decline from net pricing and product mix and a $0.9 million foreign currency headwind.
The College Inn and Kitchen Basics acquisition contributed $29 million in sales, while the Green Giant U.S. frozen co-manufacturing agreement generated $26.3 million. These contributions more than offset the absence of $54.1 million in prior-year sales from the divested Green Giant U.S. frozen and Le Sueur U.S. businesses.
For the first three quarters of fiscal 2026, base business net sales grew 1.8% to $1,116 million, primarily supported by higher volumes.
B&G Foods' Segment Performance Reflects Mixed Trends
Specialty segment revenues increased 8.3% year over year to $163 million, primarily driven by higher institutional bulk vegetable oil sales and increased Grandma's Molasses volumes. However, segment adjusted EBITDA declined 10.2% to $33.9 million due to higher oil input and transportation costs.
Meals segment revenues rose 27.9% to $140.6 million, largely benefiting from the College Inn and Kitchen Basics acquisition. Excluding acquisition contributions, sales grew 1.5%. Segment adjusted EBITDA increased 24.7% to $29.8 million.
Spices & Flavor Solutions revenues edged up 0.3% to $101.7 million, aided by private-label and foodservice growth and moderate pricing gains. Segment adjusted EBITDA advanced 24.1% to $32.7 million, reflecting improved pricing, lower tariff expenses and reduced operating costs.
Frozen & Vegetables revenues decreased 29.6% to $54.5 million, primarily due to divestitures. Nevertheless, segment adjusted EBITDA increased 37.3% to $5.7 million, benefiting from the Green Giant U.S. frozen divestiture and co-manufacturing arrangement.
BGS Sees Margin Expansion Amid Cost Pressures
Adjusted gross profit increased to $111.2 million from $98.8 million a year ago. Adjusted gross margin expanded 170 basis points to 24.2%, reflecting the acquisition of higher-margin brands, the divestiture of lower-margin operations and reduced tariff expenses.
Adjusted EBITDA increased 16.2% year over year to $81.8 million, while the adjusted EBITDA margin expanded 180 basis points to 17.8%.
Selling, general and administrative expenses rose 14.9% to $51.3 million, primarily due to higher acquisition, divestiture-related and nonrecurring expenses. Excluding these items, SG&A expenses represented 8.9% of sales, down from 9.6% a year earlier.
Net interest expense increased 20.1% to $44.8 million, reflecting higher average debt and borrowing costs.
B&G Foods Focuses on Cash Generation and Deleveraging
The company reported adjusted net income of $17.8 million, up 51.3% year over year. However, GAAP results reflected a net loss of $32.5 million compared with a loss of $19.1 million a year earlier, primarily due to a $40.7 million noncash impairment charge related to the B&M and Joan of Arc brands.
Operating activities used $28.5 million in cash during the quarter compared with $64.6 million in the prior-year period.
Management remains focused on improving cash conversion and reducing leverage. The consolidated leverage ratio stood slightly above 6.4 times, with the company targeting a reduction below 6 times by mid-2027 and below 5.5 times over the longer term.
BGS Raises Fiscal 2026 Sales and EBITDA Outlook
B&G Foods increased its fiscal 2026 net sales guidance to $1,760-$1,800 million and adjusted EBITDA guidance to $280-$290 million. The company reaffirmed its adjusted earnings outlook of 57.5-67.5 cents per share.
Management expects an adjusted EBITDA margin of approximately 15.9-16.1%.
B&G Foods Targets Productivity and Operating Gains
The company is targeting annual incremental productivity improvements equivalent to approximately 3% of the cost of goods sold, emphasizing procurement, manufacturing efficiency, logistics and operational simplification.
Looking ahead to fiscal 2027, management anticipates continued inflationary pressures from diesel fuel, transportation and soybean oil. However, productivity initiatives and incremental benefits from recently completed transactions are expected to help offset these headwinds.
The Zacks Rank #3 (Hold) stock has tumbled 43% over the past year compared with the industry’s decline of 11.2%.
Stocks to Consider
Lamb Weston Holdings, Inc. (LW - Free Report) , a leading global manufacturer, marketer and distributor of value-added frozen potato products, currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Lamb Weston’s current fiscal-year EPS implies growth of 7.6% from the year-ago figure. LW delivered a trailing four-quarter earnings surprise of 22.1%, on average.
The J.M. Smucker Company (SJM - Free Report) , a leading manufacturer and marketer of branded food, beverage, pet food and pet snack products, currently carries a Zacks Rank #2 (Buy). SJM delivered a trailing four-quarter earnings surprise of 13.8%, on average.
The Zacks Consensus Estimate for The J.M. Smucker’s current fiscal-year EPS implies growth of 17.1% from the year-ago figure.
Altria Group, Inc. (MO - Free Report) , a leading U.S. tobacco and nicotine company, currently carries a Zacks Rank of 2. MO delivered a trailing four-quarter earnings surprise of 1.3%, on average.
The Zacks Consensus Estimate for Altria Group’s current fiscal-year sales and EPS indicates an increase of 3% and 5.2%, respectively, from the year-ago period.