Frozen Vegetables Under Pressure: Tariff Contradictions and Strategic Shifts in Latest Earnings Call

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Challenging Financial Performance:
- B&G Foods reported net sales for Q1 2025 at $425.4 million, a 10.5% decrease year-on-year.
- Adjusted EBITDA declined by $15.9 million, with the Frozen & Vegetables segment contributing approximately two-thirds of the decline.
- The decrease was primarily due to lower net sales and increased promotional trade spending.

Consumer Trends and Retailer Inventory:
- Consumption trends were approximately minus 6% in Q1 2025, with April trends showing improvement to minus 2% to 3%.
- Retailers significantly under-shipped consumption across major retailers, leading to an estimated $15 million net sales impact in Q1.
- Easter timing shifts also contributed to a net sales impact of approximately $8 million.

Portfolio Reshaping and Strategic Review:
- B&G Foods is considering the divestiture of the Frozen & Vegetables business, with a focus on sharpening focus, simplifying the portfolio, and improving margins.
- The strategic review aims to create a more focused B&G Foods with adjusted EBITDA as a percentage of net sales approaching 20% and increased cash flow generation.

Cost Reduction and Financial Guidance:
- The company is implementing cost reduction plans to achieve approximately $10 million of savings for the remainder of the year, with an annual run rate of $15 million to $20 million.
- B&G Foods revised its fiscal year 2025 guidance for net sales to $1.86 billion to $1.91 billion and adjusted EBITDA to $280 million to $290 million due to a slow start and uncertain economic environment.