B&G Foods Q3 Earnings Call Highlights

Key Points

• B&G Foods raised its 2026 sales and adjusted EBITDA outlook to $1.76 billion–$1.8 billion and $280 million–$290 million, respectively, while reaffirming adjusted EPS guidance of $0.575–$0.675.
• Third-quarter net sales rose 4.7% to $459.8 million and adjusted EBITDA increased to $81.8 million, with higher volumes across all four segments and contributions from College Inn and Kitchen Basics. Adjusted gross margin also improved to 24.2% from 22.5%.
• The company reported a wider net loss of $32.5 million, including a $40.7 million non-cash impairment charge tied to the B&M and Joan of Arc trademarks. Leverage was just over 6.4 times at quarter-end, and management aims to bring it below six times by mid-2027.

B&G Foods NYSE: BGS raised its full-year sales and adjusted EBITDA guidance after reporting third-quarter sales growth driven by higher volumes across its portfolio. The company also posted a wider net loss after recording an impairment tied to the sale of two brands.

Net sales rose 4.7% to $459.8 million from a year earlier, while base business net sales increased 5%, Chief Financial Officer Bruce Wacha said. Adjusted EBITDA climbed to $81.8 million from $70.4 million, and adjusted diluted earnings per share rose to $0.21 from $0.15.

Chief Executive Officer Robert Mills said the sales momentum continued into the fourth quarter. The company now expects 2026 net sales of $1.76 billion to $1.8 billion and adjusted EBITDA of $280 million to $290 million. It reaffirmed its adjusted diluted earnings forecast of $0.575 to $0.675 per share.

Volume Growth and Portfolio Changes

Third-quarter base business sales growth reflected a $23.6 million increase from higher volumes, partly offset by a $3.3 million decrease from net pricing and product mix and a $0.9 million foreign-exchange impact. All four reporting segments contributed to base business sales growth, Wacha said.

The acquired College Inn and Kitchen Basics brands generated $29 million in quarterly sales, while the Green Giant U.S. frozen contract manufacturing business contributed $26.3 million. Together, those contributions more than offset $54.1 million in prior-year sales from the since-divested Green Giant U.S. Frozen and Le Sueur U.S. businesses.

B&G reported a net loss of $32.5 million, or $0.40 per diluted share, compared with a loss of $19.1 million, or $0.24 per share, a year earlier. The latest loss included a $40.7 million pretax non-cash impairment charge related to the B&M and Joan of Arc trademarks. The sale of those brands closed after the quarter ended.

Adjusted gross margin rose to 24.2% from 22.5%, primarily reflecting the addition of the higher-margin College Inn and Kitchen Basics brands and the divestiture of the lower-margin Green Giant U.S. frozen business, Wacha said. Net interest expense increased to $44.8 million from $37.3 million, primarily because of higher average debt and the 11% rate on new senior notes due 2031.

Alternative Channels Support Sales

Management said the company is using its manufacturing capacity to expand beyond branded retail into private-label, food-service, club and industrial sales. Wacha said approximately 60% to 70% of the business is core branded retail, with the remainder represented by those other channels.

Specialty segment sales rose 8.3% to $163 million, helped by institutional bulk vegetable oil sales and higher Grandma’s Molasses volumes. The segment’s adjusted EBITDA fell $3.8 million, however, as higher soybean and canola oil costs for Crisco and transportation expenses weighed on results.

Wacha said B&G had been relatively well covered on soybean oil purchases for much of the year, but Crisco margins were lower than in the prior year. He said diesel and soybean oil costs had recently declined from their peaks, although they remained elevated.

Spices and flavor solutions sales edged up 0.3% to $101.7 million, supported by private-label and food-service growth. Meals sales rose 27.9% to $140.6 million, largely due to the College Inn and Kitchen Basics acquisition.

Leverage and Outlook

Mills said B&G aims to reduce its credit-agreement consolidated leverage ratio to below six times by the middle of 2027 and eventually below 5.5 times. Wacha said the ratio was just over 6.4 times at the end of the third quarter, approximately half a turn below the same period a year earlier. He noted that the third quarter is typically the company’s seasonal high because of working-capital needs.

Asked about Green Giant Canada following a canceled deal, Wacha said B&G’s base case is to retain the business and improve its profitability, though a sale to another party remains possible. Third-quarter sales for Green Giant Canada increased 21.6% year over year, he said.

The 2026 outlook includes only acquisitions and divestitures that have already closed and excludes any potential sale of Green Giant Canada. Wacha also noted that fiscal 2026 has one fewer week than fiscal 2025. The company expects capital expenditures of approximately $25 million or less this year.

Looking beyond 2026, Mills said B&G’s broad strategy remains organic growth of zero to 2%, supplemented by potential acquisitions. Wacha said the company typically provides guidance for the following year after reporting fourth-quarter results.

About B&G Foods (NYSE:BGS)

B&G Foods, Inc. is a branded food company headquartered in Parsippany, New Jersey. The company manufactures, sells and distributes a portfolio of shelf-stable, frozen and specialty food products through grocery stores, mass merchandisers, club stores, foodservice distributors and e-commerce channels. Its products include vegetables, beans, pickles, condiments, sauces, spices, seasonings, baking products, hot cereals, snacks and frozen foods. B&G Foods' brand portfolio has included Ortega Mexican foods, Cream of Wheat, Mrs. Dash, Maple Grove Farms, Polaner, Cary's, Las Palmas, Underwood and B&G pickles, among other consumer food brands.

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