- B&G Foods posted net sales of $368.1 million during the second quarter, an increase of 20.2% from the same period a year earlier. The sales increase was largely due to a pair of acquisitions in late 2016, the company said in a press release. Overall, net income was $22.1 million, a decrease of 27.1% from $30.3 million in the second quarter of 2016.
- “The second quarter of 2017 was a difficult one, as we continued to struggle with the many challenges facing our industry," Robert Cantwell, president and chief executive officer of B&G Foods, said in a statement. "As a result, we are lowering our adjusted EBITDA and adjusted diluted earnings per share guidance while reaffirming our net sales guidance at the lower end of our range."
- B&G now expects net sales of about $1.64 billion to $1.67 billion and adjusted EBITDA of $352.5 million to $367.5 million. In April, the company forecast sales between $1.64 billion to $1.68 billion and adjusted EBITDA between $360 million to $375 million.
B&G, which has rapidly built up its roster of brands in recent years through a series of acquisitions, is being plagued by the same problems facing many other packaged food companies. Shoppers are purchasing more fresh and natural items, shunning packaged foods that for decades were popular staples in U.S. kitchens.
Sales during the second quarter reached $368.1 million — trailing estimates of $377.5 million — from $306.4 million a year ago. But about $77 million came from new brands it recently purchased. Without them, sales at B&G would have declined. Late last year, the company acquired Victoria Fine Foods Holding Company and Victoria Fine Foods, LLC, as well as the spices and seasonings segment of ACH Food Companies.
"We doubled the size of our company with our last three acquisitions, and all are performing above expectations," Cantwell said in the statement.
While the company grows, some of its acquired brands have shown they are not immune to market challenges. Sales of Pirate Brands decreased $3.4 million, primarily due to a shift in timing of certain promotional spending from the second quarter of last year to the third quarter of this year.
Net sales of Green Giant frozen products, which the company bought from General Mills for $765 million in 2015, increased by $9.4 million, driven by the brand’s new innovative products. This increase was partially offset by decreases in net sales of Green Giant shelf-stable products of $7.6 million that were plagued by factors including distribution losses with certain customers and increases in coupon and slotting expenses.
The growth in sales at B&G also is coinciding with higher expenses, largely tied to additional marketing, acquisitions and warehousing. Selling, general and administrative expenses as a percentage of sales at B&G increased 2.5% to 13.5% for the second quarter of 2017 from 11.0% in the second quarter of 2016.
B&G did not mention plant consolidation, layoffs or other cost-cutting measures that food manufacturers such as TreeHouse Foods and Kellogg discussed during their own earnings announcements this week. But unless things turn around, B&G could soon have yet another thing in common with other packaged food companies.