B&G Foods Emphasizes Commitment to Portfolio Restructuring After $222M Q4 Net Loss
B&G Foods, the maker of Crisco, Cream of Wheat and Ortega, is doubling down on its portfolio reshaping efforts, seeking to build a “stable platform” for future growth after posting a Q4 net loss of $222.4 million in its earnings report yesterday.
“[Simplifying our portfolio] is a very high priority for the company and critical to our future strategic direction and risk profile. The end game is to create a more highly focused B&G Foods with […] a more efficient cost structure and clear synergies within the portfolio,” CEO Kenneth Keller told shareholders during yesterday’s earnings call.
The company’s quarterly net loss was primarily driven by pre-tax, non-impairment charges of $320 million related to intangible trademark assets and a reduction in base business net sales, per the report. It also included a net loss of sale of assets related to the $4.8 million divestiture of the Green Giant U.S. shelf-stable business in Q4 2023.
In the quarter ending December 28, B&G saw net sales fall 4.6% year-over-year to $551.6 million, reflecting the Green Giant U.S. shelf-stable divestiture, a decrease in unit volume and the negative impact of foreign currency.
Keller attributed the “difficult year for B&G and the packaged foods industry” to shifting consumer purchase patterns in the wake of higher inflation. Despite the headwinds, margins slightly improved in Q4, with adjusted growth profit percentage of 22.2% compared to 21.9% in the prior-year period.
One bright spot in B&G’s earnings report was its Spices and Flavor Solutions business – including the Dash, Spice Island and Weber brands – which saw a 5% increase in net sales for Q4. The segment has benefited from the growth of fresh produce and proteins in the perimeter of the grocery store, per Keller.
Looking ahead, portfolio reshaping remains B&G’s primary goal, as it believes these efforts will increase cash flow generation, improve margins and build a platform that can be used for “future-focused M&A growth.” According to Keller, the company is finalizing the strategic review of its frozen and remaining canned vegetable business for possible divestiture.
When B&G Foods sold the U.S. Green Giant shelf-stable product line to Seneca Foods Corporation in 2023, it retained ownership of the Green Giant trademark, as well as the Green Giant Frozen and Green Giant Canada businesses. According to yesterday’s earnings call, B&G may soon offload the brand entirely.
“Green Giant remains a strong brand with broad awareness and distribution, and the frozen vegetables category is on trend with health and dietary trends, [but] it might not be the right fit for B&G,” said Keller. “There are no plans to add more assets in the frozen portfolio, given the opportunities in our core shelf-stable businesses.”
For fiscal 2025, B&G expects net sales in the range of $1.89 billion to $1.95 billion, adjusted EBITDA between $290 million and $300 million and adjusted EPS between $0.65 and $0.75. The projections take into account the continued elevated costs in categories like black pepper, olive oil, tomatoes and core vegetables.
When asked about B&G’s contingency planning for its manufacturing facility in Mexico, given President Trump’s proposed tariffs, Keller said there “are probably offsets” and you “may start to see a pretty significant weakening in the currency.”
“We expect first-half fiscal 2025 trends to be soft, with sequential improvement in the second half of the year as we lap consumer purchasing changes following high inflation across the packaged foods industry,” said Keller.
