B&G Foods Inc. Q2 2025 Earnings Call Highlights: Strategic Divestitures, Focused Growth Amid Challenges

B&G Foods reported Q2 2025 earnings with sequential improvement in trend and performance after a challenging Q1. The company completed two key divestitures, expected to sharpen focus, simplify the business, and improve margins and cash flow. However, Q2 net sales were down 4.5% YoY, and adjusted EBITDA decreased 9.3% YoY. The frozen and vegetables business unit experienced a significant decline in segment adjusted EBITDA, while the specialty business unit saw an 8% decline in net sales due to lower Crisco oil pricing.

B&G Foods Inc. (BGS) reported its Q2 2025 earnings on August 4, revealing a mixed performance with sequential improvement in trend and performance following a challenging Q1. The company's net sales decreased by 4.5% year-over-year (YoY) to $424.4 million, while adjusted EBITDA fell by 9.3% YoY to $58 million. Despite these financial misses, the stock price remained stable, closing at $4.14 with a slight uptick of 0.48% in aftermarket trading.

Key Takeaways
B&G Foods missed both earnings per share (EPS) and revenue forecasts for Q2 2025. The company's EPS was $0.04, falling short of the anticipated $0.06, marking a negative surprise of 33.33%. Revenue also lagged behind expectations, coming in at $424.4 million compared to the forecasted $429 million, a 1.07% shortfall.

The company's net sales decreased by 4.5% YoY, reflecting challenges within the consumer spending environment and competitive pressures. Adjusted EBITDA also decreased by 9.3% compared to the same period last year, highlighting ongoing operational challenges. Despite these misses, the stock saw a minor increase in aftermarket trading.

Cost reduction plans are anticipated to yield $10 million in savings in the second half of the year. The company is focusing on reducing its leverage through divestitures.

Company Performance
B&G Foods experienced a decline in overall company performance for the second quarter of 2025. Net sales dropped by 4.5% YoY, reflecting challenges within the consumer spending environment and competitive pressures. The company’s adjusted EBITDA also decreased by 9.3% compared to the same period last year, highlighting ongoing operational challenges.

Financial Highlights
- Revenue: $424.4 million, down 4.5% YoY
- Earnings per share: $0.04, down from the forecasted $0.06
- Adjusted EBITDA: $58 million, down 9.3% YoY
- Net cash from operations: $17.8 million
- Net debt reduced to $1.957 billion

Earnings vs. Forecast
B&G Foods reported an EPS of $0.04, missing the forecast of $0.06 by 33.33%. Revenue came in at $424.4 million, slightly below the expected $429 million, representing a 1.07% miss. The magnitude of these misses reflects ongoing challenges in the company’s operational environment.

Market Reaction
Despite the earnings miss, B&G Foods’ stock remained stable, closing at $4.14 and experiencing a slight increase of 0.48% to $4.16 in aftermarket trading. The stock’s performance indicates a neutral to slightly positive investor sentiment, possibly buoyed by the company’s strategic initiatives and cost-saving measures.

Outlook & Guidance
For the full year 2025, B&G Foods projects net sales between $1.830 billion and $1.880 billion, with adjusted EBITDA expected to range from $273 million to $283 million. The company anticipates adjusted EPS between $0.50 and $0.60. It expects the second half of the year to show flat to slightly positive net sales, aided by a 53rd week contributing 2-3% growth in Q4.

Executive Commentary
CEO Casey Keller emphasized, "We are making good progress in reshaping and restructuring our portfolio," highlighting the company’s focus on strategic divestitures and cost reductions. CFO Bruce Wacha added confidence in reducing the company’s pro forma net leverage ratio by at least a full turn.

Risks and Challenges
Input cost inflation remains a concern, affecting profit margins. The consumer spending environment is challenging, impacting sales growth. Tariff impacts, particularly in spices, pose significant hurdles. Competitive pressures in promotional and merchandising efforts could affect market share. The company’s high net debt level continues to be a financial risk.

References
[1] https://www.investing.com/news/transcripts/earnings-call-transcript-bg-foods-misses-q2-2025-forecasts-stock-steady-93CH-4169003