B&G Foods Shares Up 4% Amid Strategic Transformation Plan

B&G Foods (BGS) shares jumped 4% after outlining a strategic transformation plan at the Barclays Global Consumer Staples Conference. The company plans to simplify its portfolio by focusing on core categories and divesting the Green Giant business by 2025. B&G Foods aims to reduce net leverage to 6x and target an EBITDA margin of 18%-20%. The company also reported an improving sales trend and a new $10 million cost-saving initiative.

B&G Foods (BGS) shares surged 4% following the company's strategic transformation plan presentation at the Barclays 18th Annual Global Consumer Staples Conference. CEO Casey Keller and CFO Bruce Wacha outlined the company's plans to simplify its portfolio by focusing on core categories and divesting the Green Giant business by 2025. The company aims to reduce net leverage to 6x and target an EBITDA margin of 18%-20% [1].

Keller emphasized the need for a core portfolio consisting of spices, seasonings, meals, and baking staples. The Green Giant business, described as a low-margin, high working capital business, is set to be divested to reduce complexity and improve margins. The company has already divested several businesses, including Back to Nature, Green Giant canned vegetables, LeSueur, and tomato businesses in New Jersey [1].

The company reported improving sales trends, with Q1 sales declining by 9%, Q2 by 4%, and early Q3 results suggesting a decline of 1% to 2%. Keller expressed optimism about the company's restructuring and financial goals, noting that the company aims for 1% top-line growth and 2% bottom-line growth across its core portfolio. Additionally, the company is implementing a $10 million cost-saving initiative in Q3 and Q4, focusing on productivity and trade spend efficiency [1].

The company anticipates organic sales to decline in the low single-digit range in the latter half of the year, with spices and seasonings expected to achieve low single-digit growth, meals by around 1%, and baking staples projected to remain flat but maintain solid margins and cash flow [1].

References:
[1] https://www.investing.com/news/transcripts/bg-foods-at-barclays-conference-strategic-restructuring-and-challenges-93CH-4223205