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Here's What You Must Note Before B&G Foods (BGS) Q4 Earnings

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B&G Foods, Inc. (BGS - Free Report) , which acquired Farmwise, is slated to release fourth-quarter 2019 results on Feb 25. This frozen food and household products provider delivered a positive earnings surprise of 5.9% in the last reported quarter. However, the company’s earnings have underperformed the Zacks Consensus Estimate by 8.5%, on average, in the trailing four quarters.

The Zacks Consensus Estimate for fourth-quarter earnings has declined 20.5% over the past 30 days to 31 cents per share. This also suggests a decline of 8.8% from the year-ago period’s reported figure. Nonetheless, the consensus mark for revenues is $463 million, indicating a 1.1% rise from the figure reported in the year-ago quarter.

B&G Foods, Inc. Price and EPS Surprise

B&G Foods, Inc. Price and EPS Surprise

B&G Foods, Inc. price-eps-surprise | B&G Foods, Inc. Quote

Key Factors to Note

B&G Foods has been seeing soft sales for a while. In its last earnings call, management stated that fourth-quarter sales are likely to reflect the adverse impacts of Pirates Brands’ divestiture. In fact, the divestiture weighed on sales in the last reported quarter as well, which was partly compensated by the McCann and Clabber Girl acquisitions. Also, B&G Foods’ focus on innovation, especially in the Green Giants portfolio, has been a key driver.

However, increased input costs due to short agriculture crop season have been a hurdle for B&G Foods. Input cost inflation is likely to have persisted and kept margins under pressure in 2019, raising concerns for the to-be-reported quarter. Nonetheless, the company’s pricing initiatives bode well. Management earlier stated that it expects pricing initiatives to aid sales by $15-$20 million in 2019. Efficient pricing and cost-saving efforts are likely to have offered some respite to B&G Foods against input cost inflation in 2019.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict an earnings beat for B&G Foods this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here.

B&G Foods has a Zacks Rank #5 (Strong Sell) and an Earnings ESP of 0.00%. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Stocks With Favorable Combinations

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat:

Monster Beverage Corporation (MNST - Free Report) has an Earnings ESP of +3.38% and Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Smucker (SJM - Free Report) has an Earnings ESP of +0.39% and a Zacks Rank #3.

Chewy Inc. (CHWY - Free Report) has an Earnings ESP of +23.33% and a Zacks Rank #3.

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