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B&G Foods (BGS) Q1 Earnings Beat Estimates, Sales up
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B&G Foods, Inc. (BGS - Free Report) posted robust first-quarter 2020 results, with the top and the bottom line surpassing the Zacks Consensus Estimate. Moreover, earnings and sales increased on a year-over-year basis.
The company has been witnessing a rapid increase in demand for its products since the second half of March 2020, thanks to coronavirus-led stockpiling and higher at-home consumption. In this regard, B&G Foods’ higher net sales to mass merchants, warehouse clubs, supermarkets, wholesalers and e-commerce consumers have more than offset lower demands from Foodservice clients. Moreover, this trend continued in April as net sales during the month increased 60% year over year.
To maintain financial flexibility amid the pandemic, B&G Foods has drawn down $100.0 million from its revolving credit facility in the middle of March. Due to uncertainties related to the coronavirus outbreak, management has refrained from providing any guidance for fiscal 2020. Nevertheless, it anticipates net sales and adjusted EBITDA for fiscal 2020 to significantly exceed the previously-provided guidance in February.
Adjusted earnings of 46 cents per share beat the Zacks Consensus Estimate of 43 cents. Moreover, the bottom line increased 4.5% year over year. The upside can be attributed to increased sales.
B&G Foods’ net sales of $449.4 million rose 8.9% year over year and surpassed the Zacks Consensus Estimate of $420 million. The top line was buoyed by the contribution of $18.7 million from Clabber Girl (acquired in May 2019). Moreover, higher demand owing to the coronavirus outbreak supported the upside.
Net sales from the company’s base business rose 4.3% to $430.5 million on $8.2-million increase in unit volume along with improved net pricing to the tune of $9.2 million. Net sales from Green Giant products (including Le Sueur) increased 16.3%.
Adjusted gross margin was 23.9%, down 60 basis points (bps) year over year. SG&A expenses increased 4.4% to $40 million, thanks to rise in general and administrative expenses as well as escalated selling costs. This was partially offset by lower warehousing and consumer marketing costs along with a decline in certain non-recurring costs and costs related to acquisitions/divestitures. As a percentage of sales, SG&A expenses inched up rose 0.4% to 8.9%.
Adjusted EBITDA increased 6.4% to $80.7 million driven by improved sales owing to the pandemic and contributions from Clabber Girl. Adjusted EBITDA margin contracted 40 bps to 18%.
Other Financial Updates
The companyconcluded the quarter with cash and cash equivalents of $127.1 million, long-term debt of $1,974.9 million and shareholders’ equity of $796.3 million.
Price Performance
The Zacks Rank #1 (Strong Buy) stock has surged 39.4% in the past three months compared with the industry’s growth of 10.7%.
Campbell Soup Company (CPB - Free Report) has a long-term earnings growth rate of 7.2% and a Zacks Rank #2.
Conagra Brands (CAG - Free Report) has a long-term earnings growth rate of 7% and a Zacks Rank #2.
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B&G Foods (BGS) Q1 Earnings Beat Estimates, Sales up
B&G Foods, Inc. (BGS - Free Report) posted robust first-quarter 2020 results, with the top and the bottom line surpassing the Zacks Consensus Estimate. Moreover, earnings and sales increased on a year-over-year basis.
The company has been witnessing a rapid increase in demand for its products since the second half of March 2020, thanks to coronavirus-led stockpiling and higher at-home consumption. In this regard, B&G Foods’ higher net sales to mass merchants, warehouse clubs, supermarkets, wholesalers and e-commerce consumers have more than offset lower demands from Foodservice clients. Moreover, this trend continued in April as net sales during the month increased 60% year over year.
To maintain financial flexibility amid the pandemic, B&G Foods has drawn down $100.0 million from its revolving credit facility in the middle of March. Due to uncertainties related to the coronavirus outbreak, management has refrained from providing any guidance for fiscal 2020. Nevertheless, it anticipates net sales and adjusted EBITDA for fiscal 2020 to significantly exceed the previously-provided guidance in February.
B&G Foods, Inc. Price, Consensus and EPS Surprise
B&G Foods, Inc. price-consensus-eps-surprise-chart | B&G Foods, Inc. Quote
Q1 Highlights
Adjusted earnings of 46 cents per share beat the Zacks Consensus Estimate of 43 cents. Moreover, the bottom line increased 4.5% year over year. The upside can be attributed to increased sales.
B&G Foods’ net sales of $449.4 million rose 8.9% year over year and surpassed the Zacks Consensus Estimate of $420 million. The top line was buoyed by the contribution of $18.7 million from Clabber Girl (acquired in May 2019). Moreover, higher demand owing to the coronavirus outbreak supported the upside.
Net sales from the company’s base business rose 4.3% to $430.5 million on $8.2-million increase in unit volume along with improved net pricing to the tune of $9.2 million. Net sales from Green Giant products (including Le Sueur) increased 16.3%.
Adjusted gross margin was 23.9%, down 60 basis points (bps) year over year. SG&A expenses increased 4.4% to $40 million, thanks to rise in general and administrative expenses as well as escalated selling costs. This was partially offset by lower warehousing and consumer marketing costs along with a decline in certain non-recurring costs and costs related to acquisitions/divestitures. As a percentage of sales, SG&A expenses inched up rose 0.4% to 8.9%.
Adjusted EBITDA increased 6.4% to $80.7 million driven by improved sales owing to the pandemic and contributions from Clabber Girl. Adjusted EBITDA margin contracted 40 bps to 18%.
Other Financial Updates
The companyconcluded the quarter with cash and cash equivalents of $127.1 million, long-term debt of $1,974.9 million and shareholders’ equity of $796.3 million.
Price Performance
The Zacks Rank #1 (Strong Buy) stock has surged 39.4% in the past three months compared with the industry’s growth of 10.7%.
Other Solid Food Stocks
General Mills (GIS - Free Report) has a long-term earnings growth rate of 7.5% and a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Campbell Soup Company (CPB - Free Report) has a long-term earnings growth rate of 7.2% and a Zacks Rank #2.
Conagra Brands (CAG - Free Report) has a long-term earnings growth rate of 7% and a Zacks Rank #2.
Today's Best Stocks from Zacks
Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2019, while the S&P 500 gained and impressive +53.6%, five of our strategies returned +65.8%, +97.1%, +118.0%, +175.7% and even +186.7%.
This outperformance has not just been a recent phenomenon. From 2000 – 2019, while the S&P averaged +6.0% per year, our top strategies averaged up to +54.7% per year.
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