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B&G Foods, Inc. (BGS)·Q1 2025 Earnings Summary

Executive Summary

  • Q1 2025 was weak: net sales fell 10.5% to $425.4M, adjusted EBITDA dropped 21.2% to $59.1M, and adjusted EPS was $0.04; drivers included retailer destocking ($15M), Easter timing shift ($8M), and heavier trade promotion, particularly at Green Giant .
  • Versus Wall Street (S&P Global) consensus: BGS missed on revenue ($425.4M vs $459.3M*), adjusted EBITDA ($59.1M vs $70.5M*), and adjusted EPS ($0.04 vs $0.155*) for Q1 2025; Q4 2024 had a modest top-line and EPS beat but a slight EBITDA miss* .
  • Guidance cut: FY25 net sales lowered to $1.86–$1.91B (from $1.89–$1.95B), adjusted EBITDA to $280–$290M (from $290–$300M), and adjusted EPS to $0.55–$0.65 (from $0.65–$0.75); non-operational items (interest, D&A, tax rate, capex) were maintained .
  • Management is accelerating portfolio reshaping and cost actions (targeting ~$10M in FY25 savings; $15–$20M run-rate) and reiterated strategic review of Frozen & Vegetables; they later sold Don Pepino & Sclafani to reduce debt .
  • Near-term stock reaction was “more dramatic than expected,” with catalysts including the guidance cut, Green Giant promotional investment and margin compression; April trends showed stabilization (consumption -2% to -3%) .

What Went Well and What Went Wrong

What Went Well

  • Cash generation strengthened: cash from operations rose to $52.7M in Q1 (vs $35.1M in Q1’24) .
  • Spices & Flavor Solutions and Canadian Frozen performed resiliently; Frozen & Vegetables in Canada drove mid-single-digit net sales growth despite FX headwinds .
  • Management tone on stabilization: “recent net sales in March, April and early May have begun to show stabilizing trends versus last year” (Casey Keller) ; April net sales down only ~2% with Green Giant showing strength .

What Went Wrong

  • Significant quarterly miss vs consensus: revenue ($425.4M vs $459.3M*), adjusted EBITDA ($59.1M vs $70.5M*), adjusted EPS ($0.04 vs $0.155*) .
  • Frozen & Vegetables segment EBITDA turned negative (-$1.5M), impacted by stepped-up trade promotion, elevated pack costs for corn and peas, and lower net pricing .
  • SG&A intensity rose to 11.6% of sales (10.2% LY) due to higher non-recurring/acquisition-related expenses, offset by lower marketing and selling spend .

Financial Results

Headline results vs prior quarters

MetricQ3 2024Q4 2024Q1 2025
Net Sales ($USD Millions)$461.1 $551.6 $425.4
Adjusted EBITDA ($USD Millions)$70.4 $86.1 $59.1
Adjusted EBITDA Margin %15.3% 15.6% 13.9%
Adjusted Diluted EPS ($)$0.13 $0.31 $0.04
GAAP Diluted EPS ($)$0.09 $(2.81) $0.01
Gross Profit ($USD Millions)$102.3 $118.7 $90.1
Adjusted Gross Margin %22.2% 22.2% 21.3%

vs S&P Global consensus (context)

MetricQ4 2024 Estimate*Q4 2024 ActualQ1 2025 Estimate*Q1 2025 Actual
Revenue ($USD Millions)$547.95*$551.57 $459.33*$425.40
Adjusted EBITDA ($USD Millions)$85.14*$83.69 $70.48*$59.10
Adjusted/Primary EPS ($)$0.301*$0.31 $0.155*$0.04

Values retrieved from S&P Global.*

Segment breakdown (Q1 2025)

SegmentNet Sales ($USD Millions)Segment Adjusted EBITDA ($USD Millions)
Specialty$134.400 $33.520
Meals$106.142 $24.974
Frozen & Vegetables$93.119 $(1.473)
Spices & Flavor Solutions$91.741 $26.269

KPIs (Q1 2025)

KPIQ1 2025
SG&A ($USD Millions)$49.132
Net Interest Expense ($USD Millions)$37.758
Cash from Operations ($USD Millions)$52.745
Inventories ($USD Millions)$514.235
Long-Term Debt ($USD Millions)$2,000.022
Net Debt ($USD Billions)$1.967 (CFO commentary)

Guidance Changes

MetricPeriodPrevious Guidance (Feb 25, 2025)Current Guidance (May 7, 2025)Change
Net SalesFY 2025$1.890–$1.950B $1.86–$1.91B Lowered
Adjusted EBITDAFY 2025$290–$300M $280–$290M Lowered
Adjusted Diluted EPSFY 2025$0.65–$0.75 $0.55–$0.65 Lowered
Interest ExpenseFY 2025$147.5–$152.5M $147.5–$152.5M Maintained
DepreciationFY 2025$47.5–$52.5M $47.5–$52.5M Maintained
AmortizationFY 2025$20–$22M $20–$22M Maintained
Effective Tax RateFY 202526%–27% 26%–27% Maintained
CapExFY 2025$35–$40M $30–$35M Lowered (range tightened lower)
NotesFY 2025Guidance excludes potential tariffs impacts Guidance excludes potential tariffs impacts —

Earnings Call Themes & Trends

TopicPrevious Mentions (Q3 2024)Previous Mentions (Q4 2024)Current Period (Q1 2025)Trend
Retailer inventory/destockingJuly inventory reductions (~1% sales headwind) Continued caution; base business -2% to -3% expected in Q4 Significant undershipping in Jan–Feb; ~$15M impact Intensifying in Q1; easing thereafter
Promotional trade spendElevated trade in several brands Trade spend impacted margins in Frozen Promo trade up ~175 bps; key driver of margin compression Elevated in Q1; normalizing planned
Green Giant (Frozen) performanceFX pressure, private label share in core veg; innovation pipeline Frozen adj EBITDA down; FX and pack costs headwinds ~2/3 of EBITDA decline; negative segment EBITDA; higher promo and pack costs Under strategic review; still pressured
FX (USD/MXN)FX drag on Mexico-produced Frozen FX started easing; benefits expected later Expect back-half benefit; FX remains wildcard Improving into H2
Tariffs/macroMonitoring; no specifics (pre-election) Guidance assumptions exclude tariff impacts Guidance excludes tariffs; spices sourcing risk (Vietnam/China) discussed Uncertain; risk scenario planning
Portfolio reshapingReviewing Frozen divestiture; focus on core shelf-stable Strategic review reiterated Accelerating reshaping; post-Q1 sale of Don Pepino & Sclafani to reduce debt Accelerating

Management Commentary

  • “Our first quarter results reflect the challenging environment … including the impact of retailer inventory reductions and a shift in Easter timing into the second quarter.” — Casey Keller .
  • “Adjusted EBITDA was down $15.9 million … reflecting lower net sales … and increased costs and investment in the Green Giant U.S. business.” — Casey Keller .
  • “Promotional trade spends … increased by approximately 175 basis points … driving … decrease in our gross profit and … adjusted gross profit as a percentage of net sales.” — Bruce Wacha .
  • “We have implemented efforts to reduce operating and overhead costs … expect to deliver $10 million in projected savings this year with an annual run rate of $15 million to $20 million.” — Casey Keller .
  • “We remain committed to reshaping and restructuring our portfolio … [including] possible divestiture … of Frozen & Vegetables.” — Casey Keller .

Q&A Highlights

  • Tariffs exposure and contingency planning: Management flagged spices sourcing (Vietnam/China) as biggest risk; Green Giant manufacturing in Mexico/Canada is USMCA-compliant; guidance excludes tariff impacts .
  • Retailer inventory reductions: Viewed as largely permanent efficiency shift; majority occurred in late January/February .
  • Promotional strategy: Short-term heavier promotions (Green Giant) to restore competitiveness; pulling back as trends improve .
  • Liquidity and revolver: Revolver is cash flow-based; a couple hundred million available on $475M facility .
  • Stock reaction and acceleration of actions: Management already accelerating portfolio/cost moves; the day’s market reaction reinforced urgency .

Estimates Context

  • Q1 2025 misses: Revenue $425.4M vs $459.3M* (miss), adjusted EBITDA $59.1M vs $70.5M* (miss), adjusted EPS $0.04 vs $0.155* (miss) .
  • Q4 2024 context: Revenue $551.6M vs $547.95M* (beat), adjusted EPS $0.31 vs $0.301* (beat), adjusted EBITDA $83.7M vs $85.1M* (slight miss) .

Values retrieved from S&P Global.*

Key Takeaways for Investors

  • Near-term narrative: Retailer destocking, Easter timing, and stepped-up trade spend drove Q1 miss and guidance cut; watch for normalization of promotions and consumption stabilization through Q2–Q3 .
  • Green Giant remains the pressure point; segment EBITDA turned negative in Q1; improvements are expected with lower pack costs starting in Q4 and reduced promotions, but strategic review adds execution uncertainty .
  • Cost discipline is actionable: ~$10M FY25 savings targeted (run-rate $15–$20M) should help margins in H2 amid FX tailwinds (USD/MXN) and more modest input inflation .
  • Balance sheet/risk: Net debt ~$1.97B; ~35% floating-rate exposure; 100 bps rate cut would save ~$7M interest annually — leverage reduction depends on divestitures and cash generation .
  • Guidance downside is bounded by maintained interest/D&A/tax assumptions; top-line and EBITDA ranges now reflect slower H1 and partial 53rd week benefit in Q4 .
  • Portfolio reshaping is a central catalyst: Ongoing review of Frozen & Vegetables; post-Q1 sale of Don Pepino & Sclafani demonstrates debt-reduction focus .
  • Dividend continuity maintained: $0.19/share declared for Q2, supporting income profile amidst transformation, but dependent on cash flow and leverage trajectory .