U.S. Markets close in 4 hrs 5 mins

B&G Foods (BGS) Stock Down on Input Cost Inflation & More

Zacks Equity Research

B&G Foods, Inc. BGS is losing sheen due to cost-related hurdles. Elevated costs are weighing on the company’s margins. This along with a dismal earnings surprise history has caused this Zacks Rank #4 (Sell) stock to decline almost 24% in the past six months against the industry’s growth of 3.7%.

Let’s delve deeper and see if the company’s efforts can offer any respite.



Hurdles in B&G Foods’ Path

B&G Foods is persistently being affected by increased freight expenses. The metric negatively impacted the company’s performance in the first quarter of 2019 as well. Adjusted gross margin was 24.5%, down 320 basis points (bps) year over year on account of inventory reduction initiatives, unfavorable mix and higher input costs stemming from elevated freight, warehouse and procurement expenses. During the fourth quarter of 2018, gross margin contracted 110 bps, following declines of 260 bps, 280 bps and 170 bps in the third, second and first quarters of 2018, respectively.

B&G Foods posted dismal first-quarter 2019 results, wherein both top and the bottom lines registered year-over-year decline. Also, earnings missed estimates for the fourth consecutive quarter. While earnings were hurt by lower sales and soft margins, sales were hit by Pirates Brands’ divestiture to Hershey HSY.

Also, adjusted EBITDA margin slumped on account of the same factors that hurt the gross margin. Unfortunately, input cost inflation is likely to persist in 2019, thereby keeping margins under pressure.

Will the Woes Continue?

B&G Foods’ buyouts are delivering impressive results. Markedly, Green Giants has emerged as one of the leading brands of the company, delivering sales growth for eight consecutive quarters now. In the first quarter of 2019, net sales from Green Giant products (including Le Sueur) increased 5.4% on higher sales of frozen and shelf stable products. Green Giant frozen net sales advanced 6.3%, backed by favorable consumer response to innovations. Green Giant shelf stable net sales increased 2.8%.

Also, the company is on track with its pricing and cost-saving efforts. These are expected to help B&G Foods fight input cost inflation in 2019. However, it is yet to be seen if these can completely offset the barriers.

Unsure of B&G Foods? Check These Food Stocks

General Mills GIS, with a Zacks Rank #2 (Buy), has a long-term EPS growth rate of 7%. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Flowers Foods FLO, also with a Zacks Rank #2, delivered back-to-back surprises in the last two quarters.

J&J Snack Foods JJSF, with a Zacks Rank #2, also delivered back-to-back surprises in the last two quarters.

Today's Best Stocks from Zacks

Would you like to see the updated picks from our best market-beating strategies? From 2017 through 2018, while the S&P 500 gained +15.8%, five of our screens returned +38.0%, +61.3%, +61.6%, +68.1%, and +98.3%.

This outperformance has not just been a recent phenomenon. From 2000 – 2018, while the S&P averaged +4.8% per year, our top strategies averaged up to +56.2% per year.

See their latest picks free >>


Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
 
Hershey Company (The) (HSY) : Free Stock Analysis Report
 
Flowers Foods, Inc. (FLO) : Free Stock Analysis Report
 
J & J Snack Foods Corp. (JJSF) : Free Stock Analysis Report
 
General Mills, Inc. (GIS) : Free Stock Analysis Report
 
B&G Foods, Inc. (BGS) : Free Stock Analysis Report
 
To read this article on Zacks.com click here.
 
Zacks Investment Research

  • Billionaire George Soros Snaps Up These 3 “Strong Buy” Stocks
    Business
    TipRanks

    Billionaire George Soros Snaps Up These 3 “Strong Buy” Stocks

    George Soros may be a lightning rod for political controversy, but everyone can agree that he's a market and financial genius. In recent years, Soros has made public predictions on the move to regulate internet giants Facebook and Google as public utilities, on the 'bubble' nature of cryptocurrency, and on the Democrats' off-year victory in the 2018 elections. Soros has a positive genius for finding them, and reaping their gains.

  • No shaking hands at London conference after coronavirus scare
    World
    Yahoo Finance UK

    No shaking hands at London conference after coronavirus scare

    Attendees of a conference in central London have been told not to shake hands, weeks after a British person with coronavirus attended an event at the same venue. Guests at the Make UK manufacturing conference in Westminster were told on Tuesday to avoid shaking hands with others. TV presenter Steph McGovern was comparing the event and made the announcement at the start of the conference.

  • Suze Orman says investors should ‘rejoice’ at the Dow’s more-than-1,000-point tumble on Monday — here’s why
    Business
    MarketWatch

    Suze Orman says investors should ‘rejoice’ at the Dow’s more-than-1,000-point tumble on Monday — here’s why

    Author and personal-finance expert Suze Orman had a simple two-word answer to the question of how to react to a market that just shed more than 1,000 points on the back of growing uncertainties, including the spread of the coronavirus outbreak. Orman said Monday on CNBC that investors should stay the course and explained why she thought investors worried about their retirement savings after a historic downturn for the Dow Jones Industrial Average should welcome such selloffs.

  • Pompeo Criticizes Iran, China; Gilead Drug Trials: Virus Update
    World
    Bloomberg

    Pompeo Criticizes Iran, China; Gilead Drug Trials: Virus Update

    Iran reported a total of 15 deaths from the outbreak, the most fatalities outside China, and a top health official tested positive. Italy reported a surge in infections and Spanish police isolated 1,000 people at an island resort. U.S. Secretary of State Michael Pompeo criticized Iran and China's handling of the the virus.

  • Business
    NerdWallet

    How the IRS Knows If You Cheat on Your Taxes

    Those forms, called information returns, typically are records of certain payments you received or made during the tax year that you usually need to report on your tax return. Some of the most common information returns are W-2s, which report wages earned from a job, and 1099s, which report money received for things such as freelance work, dividends or interest. But other money moves you make could put information returns in the IRS' mailbox, too, says Ignatius Jackson, a certified public accountant in Phoenix.

  • Mike Bloomberg has done an about-face on Wall Street reform
    Business
    Yahoo Finance

    Mike Bloomberg has done an about-face on Wall Street reform

    MIA on banking reform — or taking the side of industry For instance, he promises to toughen bank capital rules so that big banks do not collapse under the weight of their own debt obligations, as they did during the 2008 financial crisis. Yet, prior to the crisis, he pushed for weakening bank capital rules through adoption of the so-called “Basel II” accords. Basel II would have released hundreds of billions of equity capital from the U.S. banking system, giving particular relief to banks with large portfolios of mortgages and mortgage-backed securities.

  • The Secure Act upended estate planning and taxes for a lot of people — here’s how to adapt
    Business
    MarketWatch

    The Secure Act upended estate planning and taxes for a lot of people — here’s how to adapt

    About two months ago, I gave a presentation to a group of CPAs, attorneys, and financial professionals on the use of trusts as beneficiaries of retirement plans. Well, please let me apologize to the attendees, because Congress passed the Secure Act, blowing it all up effective Jan. 1. The Secure Act, which was signed by President Trump in December, does a number of things that change the rules around retirement plans.

  • Based On Its ROE, Is Occidental Petroleum Corporation (NYSE:OXY) A High Quality Stock?
    Business
    Simply Wall St.

    Based On Its ROE, Is Occidental Petroleum Corporation (NYSE:OXY) A High Quality Stock?

    Does Occidental Petroleum Have A Good ROE? Arguably the easiest way to assess company's ROE is to compare it with the average in its industry. The limitation of this approach is that some companies are quite different from others, even within the same industry classification.

  • NIO Soars on China Government Deal Bernstein Calls a Bailout
    Business
    Bloomberg

    NIO Soars on China Government Deal Bernstein Calls a Bailout

    But in light of the partnership, the company said it plans to raise more than 10 billion yuan ($1.43 billion). NIO shares soared as much as 34% to $5.19 shortly after the open of regular trading Tuesday in New York. The stock had been slumping since last year, as heavy spending on marketing and splashy showrooms failed to generate demand for its ES8 and ES6 electric sport utility vehicles.

  • 'Flat earther' dies in rocket crash
    U.S.
    Associated Press Videos

    'Flat earther' dies in rocket crash

    A California man who said he wanted to fly to the edge of outer space to see if the world is round has died after his home-built rocket blasted off into the desert sky and plunged back to earth. Feb.

  • Business
    Barrons.com

    The Dow Dropped 1000 Points Monday. Here’s What History Says Happens Next.

    From a technical perspective, the S&P 500 should find support near its Jan. 31 low of 3225.52, according to Macro Risk Advisors' John Kolovos. That's right about where the S&P 500, at 3,225.89, closed, and if that breaks a full-blown correction is likely in play. This is the type of distributive selling that will require a good and proper reset in price, sentiment and or time on a break,” he writes.

  • Boeing's First Order For 2020 Comes With This Switch To GE Jet Engines
    Business
    Investor's Business Daily

    Boeing's First Order For 2020 Comes With This Switch To GE Jet Engines

    ANA's deal for Boeing 787 Dreamliners with General Electric engines is the aerospace giant's first commercial order for 2020. Boeing stock fell. The Japanese airline will buy 15 widebody Boeing 787 Dreamliners worth $5 billion at list prices.

  • Business
    Bloomberg

    Rejected by Wall Street, Ford’s CEO Has Support Where It Matters

    If there were any doubts in the crowd about that statement, Hackett underscored it by discussing the early retirement of Joe Hinrichs, a Ford president whom many had seen as a potential successor to the CEO. The comment was a surprising display of force from a man who had just overseen another disappointing quarter that deepened the sell-off in Ford stock during his almost three-year tenure. The reason for such confidence: Hackett, 64, retains the backing of Executive Chairman Bill Ford.

  • Zoom Video
    Business
    Investor's Business Daily Video

    Zoom Video

    Zoom Video rebounded higher. Zoom has soared during the virus outbreak as investors see companies using Zoom software rather traveling. Could be a long-lasting trend.

  • Mallinckrodt Unveils $1.6 Billion Opioid Deal — And Generic Stocks Pop
    Business
    Investor's Business Daily

    Mallinckrodt Unveils $1.6 Billion Opioid Deal — And Generic Stocks Pop

    Shares of generic pharmaceutical companies popped Tuesday after Mallinckrodt announced a $1.6 billion opioid settlement and Perrigo gained approval for a new inhaler. In early trading on the stock market today, Mallinckrodt stock launched 25.9%, near 5.30. That prodded Teva Pharmaceutical stock up 1.9%, near 12.90.

  • Gilead Has A Shot At Battling Coronavirus — But Is GILD Stock A Buy?
    Business
    Investor's Business Daily

    Gilead Has A Shot At Battling Coronavirus — But Is GILD Stock A Buy?

    Gilead Sciences is one of the biggest biotech companies behind Amgen in terms of market valuation. But GILD stock is struggling to make a comeback after years of declining hepatitis C drug sales. Now, Gilead is trying to stake its claim in HIV treatments.

  • Buffett is bullish on stocks but says the market can drop 50% — is he wrong?
    Business
    MarketWatch

    Buffett is bullish on stocks but says the market can drop 50% — is he wrong?

    Stock market investors are watching the coronavirus spreading far beyond China. It is no longer mostly in Asia. Italy has reported six coronavirus deaths and an accelerating number of cases.

  • Politics
    Bloomberg

    Buttigieg Calls for SALT Cap Removal Ahead of California Primary

    Buttigieg updated his tax plan Monday, adding a plank that would remove the $10,000 limit on so-called SALT deductions for those earning up to $400,000, partially reversing a provision in President Donald Trump's tax law that capped those write-offs, which were previously unlimited. The proposal is likely to play well in high-tax states such as California, New York and New Jersey, Democratic strongholds where local leaders have said the cap hurts residents whose incomes and property values tend to be higher.

  • 3 Healthcare Stocks Fighting the Coronavirus
    Business
    TipRanks

    3 Healthcare Stocks Fighting the Coronavirus

    We say “hypothetically” as mRNA vaccines have yet to be tested on humans and it's still unclear how effective the new coronavirus vaccine will be. Piper Sandler's Edward Tenthoff is bullish on Moderna and notes that the company is “the leader in developing mRNA medicines. The 5-star analyst expounded, “Moderna and VRC finalized sequences to be used in mRNA-1273 and manufacture of the first clinical batch was completed on February 7th.

  • Why the market suddenly got so worried about coronavirus: Morning Brief
    Business
    Yahoo Finance

    Why the market suddenly got so worried about coronavirus: Morning Brief

    Subscribe The story is now much bigger than China The stock market on Monday got slammed. All three major indexes fell more than 3%. The Dow dropped more than 1,000 points for just the third time in its history.

  • Business
    Barrons.com

    Moderna Stock Is Jumping on Coronavirus Vaccine Progress

    The biotech firm (MRNA)announced Monday night that it had shipped vials of its experimental coronavirus vaccine to the National Institutes of Health for human trials. Shares of Moderna (ticker: MRNA) were up 16% Tuesday morning. The news came amid heightening global worry over the spread of the coronavirus known as Covid-19, which emerged in the Hubei province of China and has spread globally.

  • Business
    MarketWatch

    Energy sector tumbles toward lowest close in 10 years as oil prices fall again

    The energy is suffering another broad selloff, to lead the S&P 500's (spx) 11 key sectors in declines, as crude oil prices fall for a third-straight day amid worries that the global spread of COVID-19 will hurt demand. The SPDR Energy Select Sector ETF (xle) slumped 2.3%, with 27 of 28 components losing ground. That put the sector ETF (XLE) on track for the lowest close since July 2010.

  • Boeing’s Board Needs Overhaul, Not Rejiggering
    Business
    Bloomberg

    Boeing’s Board Needs Overhaul, Not Rejiggering

    Boeing directors Edward Liddy – the former CEO of Allstate Corp. and an interim leader at American International Group Inc. during the financial crisis — and Michael Zafirovski, a former General Electric Co. executive and an adviser to Blackstone Group Inc., will step down. Zafirovski was Boeing's longest-serving director at more than 15 years, while Liddy has been on the board since 2010 following an earlier stint that was disrupted by his appointment at AIG.

  • Mastercard CEO Ajay Banga to step down, insider Miebach tapped
    Business
    Reuters

    Mastercard CEO Ajay Banga to step down, insider Miebach tapped

    Mastercard's chief executive officer of 10 years, Ajay Banga, will step down at the start of the next year, the company said on Tuesday, and be replaced by Chief Product Officer Michael Miebach. Banga, who took charge of the company just after the 2008-09 financial crisis, has seen the payment processor's revenue triple during his tenure as online shopping gained prominence around the world. India-born Banga will take on the role of executive chairman, while Miebach will become the company's president on March 1.

  • Business
    Bloomberg

    Warren Buffett Says Reaching for Yield Is ‘Stupid,’ But a Human Impulse

    “Reaching for yield is really stupid, but it's very human,” Buffett said Monday in an interview on CNBC. Buffett, chairman and chief executive officer of Berkshire Hathaway Inc., was asked about life insurance companies that sell products, such as annuities, that promise higher returns than the rates the companies can earn on investments. Buffett, in his annual letter to shareholders Saturday, discussed his view on repurchases and corporate governance.