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B&G Foods (BGS) Lined Up for Q4 Earnings: Key Things to Note

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B&G Foods, Inc. BGS is likely to witness top and bottom-line growth when it reports fourth-quarter 2020 numbers on Mar 2. The Zacks Consensus Estimate for revenues is pegged at $526 million, suggesting an increase of 11.8% from the prior-year quarter’s reported figure.

The consensus mark for earnings is pegged at 44 cents per share, which has remained stable over the past 30 days. Further, this indicates a jump of 57.1% from the figure reported in the prior-year period. This manufacturer, distributor and seller of shelf-stable, frozen foods and household products delivered an earnings surprise of 15.6% in the last reported quarter. Further, the company has a trailing four-quarter earnings surprise of 9.3%, on average.

Key Factors to Note

The company has been benefiting from consumers’ rising demand amid coronavirus-led increased at-home consumption and pantry-loading trends. These continued to aid the company’s performance in third-quarter 2020, wherein both top and bottom lines surged year over year and beat the Zacks Consensus Estimate. The company has been witnessing a rapid increase in demand for its products since the second half of March 2020, thanks to the 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 demand from Foodservice clients.

B&G Foods, Inc. Price, Consensus and EPS Surprise

B&G Foods, Inc. Price, Consensus and EPS Surprise
B&G Foods, Inc. Price, Consensus and EPS Surprise

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

Management expects continued robust demand trends in the fourth quarter and 2021. For 2020, management anticipates net sales of around $1.95-$1.97 billion. Adjusted EBITDA is expected to be nearly $360-$370 million. The bottom line is envisioned to be roughly $2.30-$2.40 per share.

Notably, B&G Foods is benefiting from higher online sales, especially thanks to increased social-distancing trends. In the last earnings call, the company said that the proportion of sales through the e-commerce channel more than doubled this year. E-commerce sales are accelerating with pace, mainly attributable to efficient delivery services of the company’s retail customers. The company has been making solid investments to enhance its e-commerce capacity. These upsides are likely to get reflected in the upcoming results. Apart from this, B&G Foods’ buyouts have been yielding results. Farmwise (acquired in February 2020) made contributions of $0.4 million to B&G Foods’ third-quarter top line. Additionally, the company has been particularly benefiting from its Green Giants brand and is especially committed to product innovation and other brand enhancement investments in this category.

That being said, B&G Foods’ SG&A expenses have been rising year over year for the past few quarters now. Additionally, high costs associated with COVID-19 are a concern. In the last reported quarter, COVID-19 costs came in at roughly $1.5 million, while increased freight costs came in at nearly $5.5 million.

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. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

B&G Foods currently has a Zacks Rank #3 and an Earnings ESP of 0.00%.

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 this season.

Grocery Outlet Holding GO has an Earnings ESP of +7.19% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Nomad Foods NOMD has an Earnings ESP of +2.22% and a Zacks Rank #3.

Purple Innovation PRPL has an Earnings ESP of +4.76% and a Zacks Rank #3.

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