In This Article:
Release Date: February 25, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
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B&G Foods Inc (NYSE:BGS) reported fourth-quarter net sales of $551.6 million and adjusted EBITA of $86.1 million, which were in line or slightly above expectations.
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The spices and flavor solutions business unit showed strong performance with a 5% increase in net sales compared to the fourth quarter of the previous year.
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Margins improved in the fourth quarter, with an adjusted gross profit percentage of 22.2% compared to 21.9% in the fourth quarter of 2023.
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The company is committed to reshaping its portfolio to improve margins and cash flow, aiming for adjusted EBITA as a percentage of net sales to approach 20%.
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B&G Foods Inc (NYSE:BGS) reduced its net debt to $1.994 billion at the end of the fourth quarter of 2024, down from $2.05 billion at the end of the third quarter of 2024.
Negative Points
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B&G Foods Inc (NYSE:BGS) reported a net loss of $222.4 million for the fourth quarter, primarily due to pre-tax, non-cash impairment charges to intangible assets.
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Base business net sales decreased by 3.3% for fiscal year 2024 compared to fiscal year 2023.
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The company faces continued uncertainty in the near term on center store trends, with sales and consumption declines in early 2025.
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Foreign currency impacts, particularly related to the Mexican peso, negatively affected costs at the Green Giant manufacturing facility in Mexico.
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The frozen and vegetables segment experienced a decline in adjusted EBITA due to increased pack costs and the negative impact of foreign currency.
Q & A Highlights
Q: What does the impairment charge on Green Giant frozen imply about the value potential suitors may ascribe to the business? A: The impairment charge is driven by accounting and business performance rather than indicating the expected value in a potential sale. The value was previously carried at over $600 million, which is unlikely to be achieved in a sale. - Bruce Walka, CFO
Q: Can you explain the $10 to $15 million benefit from a 53rd week and why it seems lower than expected? A: The 53rd week accounts for about three days, which is why the benefit is smaller than the typical 2% top-line increase. - Bruce Walka, CFO
Q: Do you think the current headwinds in the packaged food industry are more structural or temporary? A: The current headwinds are seen as temporary reactions by consumers to higher prices. Once consumers adjust their purchase patterns, the market should stabilize, although not necessarily returning to pre-adjustment levels. - Casey Keller, CEO