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B&G Foods (BGS) Q4 Earnings, Sales Lag Estimates; Stock Down

Zacks Equity Research

Shares of B&G Foods, Inc. BGS declined over 6% in afterhours trading on Feb 23, after the company reported lower-than-expected fourth-quarter 2016 results.

Earnings and Revenues Discussion

Adjusted earnings per share of 29 cents, missing the Zacks Consensus Estimate of 41 cents by 29.3%. Earnings also decreased 32.6% from the year-ago quarter due to an increase in consumer marketing spending associated with the relaunch of the Green Giant brand.
 

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Total revenue of $413.7 million missed the Zacks Consensus Estimate of $431.8 million by 4.2%.

Revenues, however, increased 20.8% year over year driven by strong sales at Green Giant which was acquired in Nov 2015. Net sales contribution from the Green Giant brand was $46.5 million during the quarter.

Also, net sales of $28.2 million from the spices and seasonings business, acquired on Nov 21, 2016, and net sales of $3.2 million from Victoria Fine Foods, acquired on Dec 2, 2016, contributed to total net sales in the quarter.

Net sales at the company’s base business decreased 1.6% during the quarter due to a 0.6% decline in volume and 1.1% decrease in net pricing.

Inside the Headline Numbers

Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) decreased 7.4% to $62.4 million during the quarter.

Selling, general and administrative expenses increased 60.6% to $58.8 million from the prior-year quarter, primarily due to the Green Giant acquisition.

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

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

2016 Results

B&G Foods’ full-year adjusted earnings of $2.07 missed the Zacks Consensus Estimate of $2.19 by 5.5%. Nonetheless, it increased 35.3% from the year-ago quarter.

Full-year revenues of $1.39 billion missed the Zacks Consensus Estimate of $1.41 billion, but increased 44% year over year.

Financials

B&G Foods ended the quarter with cash and cash equivalents of $28.8 million, as of Dec 31, 2016, compared with $5.2 million as of Jan 2, 2016.

The company returned $100.8 million to stockholders in the form of dividends during the year.

2017 Outlook

The company expects 2017 adjusted earnings per share in the range of $2.13–$2.27. The Zacks Consensus Estimate for 2017 earnings is currently pegged at $2.43 per share.

Net sales are expected between $1.64 billion and $1.68 billion.

Adjusted EBITDA is now projected in the range of $360 million to $375 million.

B&G Foods currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank stocks here.

Peer Releases

Mondelez International, Inc. MDLZ reported fourth-quarter 2016 results, wherein earnings and revenues missed the Zacks Consensus Estimate. The underperformance was mainly due to a stronger dollar that impacted sales outside the U.S.

The Hershey Company’s HSY fourth-quarter 2016 earnings beat the Zacks Consensus Estimate while sales missed the same. Earnings benefited from higher sales in North America. Hershey’s fourth-quarter adjusted earnings per share of $1.17 also beat the year-ago profit of $1.08 by 8.3%.

J&J Snack Foods Corp. JJSF, a leading snack food provider, reported first-quarter fiscal 2017 earnings of 72 cents per share, surpassing the Zacks Consensus Estimate of 64 cents by 12.5%.

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