B&G Foods Q2 Earnings Rise on Portfolio Reshaping and Margin Gains

B&G Foods, Inc. BGS continued to reshape its portfolio in the second quarter of fiscal 2026, with recent divestitures and acquisitions materially changing its sales mix. While revenues declined, improved margins, lower selling, general and administrative expenses and contributions from higher-margin businesses supported profitability.

Adjusted earnings were 6 cents per share, up 50% from the year-ago quarter figure. Net sales fell 9.7% year over year to $383.3 million. Adjusted EBITDA increased 4.2% to $60.4 million, while adjusted EBITDA margin expanded to 15.8% from 13.7%.

BGS’ Portfolio Reshaping Drives Sales Mix

BGS’ second-quarter sales comparison reflected the Green Giant U.S. frozen, Le Sueur U.S. and Don Pepino divestitures. These businesses contributed about $68 million to net sales in the prior-year quarter and were not part of second-quarter fiscal 2026 results.

Partially offsetting this impact were $23.9 million in sales from the Green Giant U.S. frozen co-manufacturing agreement and $13.2 million from the acquired College Inn and Kitchen Basics brands. Management stated the portfolio reshaping is aimed at improving growth stability, margins and cash generation.

B&G Foods’ base business net sales declined 2.9% year over year to $346.3 million from $356.5 million. Volume reduced sales by 4.3%, while net pricing and product mix provided a 1.4% benefit. Foreign currency added nearly 0.1%. Management noted that the timing of the Fourth of July holiday reduced the quarter by about 1.5 shipping days, affecting net sales by roughly $5 million to $7 million.

BGS’ Adjusted Margin Expands

Adjusted gross profit was $83.7 million in the second quarter compared with $89.1 million a year ago. However, adjusted gross margin expanded to 21.8% from 21.0%, aided by the higher-margin College Inn and Kitchen Basics acquisition, the divestiture of the lower-margin Green Giant U.S. frozen business and tariff refunds.

Selling, general and administrative expenses decreased 14% to $40.6 million from $47.2 million. Lower warehousing, general and administrative, consumer marketing and selling expenses more than offset higher acquisition, divestiture-related and non-recurring expenses. SG&A represented 10.6% of sales compared with 11.1% a year ago.

B&G Foods’ Segments Deliver Mixed Results

Specialty segment net sales declined 4.4% to $128.9 million, while adjusted EBITDA fell 27.3% to $23.7 million. Results were pressured by lower volumes, higher Crisco oil input costs and the Don Pepino divestiture.

Meals sales increased 6.2% to $110.5 million, helped by College Inn and Kitchen Basics, pricing and mix. Adjusted EBITDA edged up 0.3% to $25.8 million. Frozen & Vegetables sales fell 47% to $47.2 million because of divestitures, while its adjusted EBITDA loss narrowed to $1.2 million from $2.7 million.

Spices & Flavor Solutions sales increased 0.1% to $96.6 million. Adjusted EBITDA climbed 29% to $31.1 million, supported by pricing, tariff refunds and lower spice input costs. Growth in foodservice and private-label channels helped offset weakness in retail.

B&G Foods’ Financial Status

B&G Foods ended the quarter with cash and cash equivalents of $591.6 million, long-term debt (net of current portion) of $2,008.5 million and total stockholders’ equity of $395.1 million. 

For the first two quarters of 2026, BGS’ net cash from operating activities amounted to about $58 million.

B&G Foods Reaffirms Fiscal 2026 View

This Zacks Rank #3 (Hold) company reaffirmed its fiscal 2026 net sales guidance of $1,735 million to $1,775 million. Adjusted EBITDA is still projected at $275 million to $290 million, while adjusted earnings are expected in the range of 57.5-67.5 cents per share.

The outlook incorporates completed divestitures, the Green Giant U.S. frozen co-manufacturing agreement and the College Inn and Kitchen Basics acquisition. It excludes the pending Green Giant Canada divestiture, which management expects to close during the third quarter of fiscal 2026.

Shares of BGS have tumbled 22.3% over the past three months, against the industry’s growth of 8.6%.

Better-Ranked Stocks to Consider

Darling Ingredients Inc. DAR, a global developer and producer of sustainable natural ingredients derived from edible and inedible bio-nutrients, currently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here

The Zacks Consensus Estimate for Darling’s current fiscal-year sales calls for 12.8% growth from the prior-year levels. The consensus estimate for current fiscal-year earnings per share (EPS) stands at $6.98, which implies substantial growth from the year-ago period. DAR delivered a trailing four-quarter earnings surprise of 38.9%, on average.

The Vita Coco Company, Inc. COCO, a leading beverage company that develops, markets and distributes coconut water and other plant-based beverages, currently sports a Zacks Rank #1. COCO delivered a trailing four-quarter earnings surprise of 21.9%, on average.

The Zacks Consensus Estimate for The Vita Coco Company’s current fiscal-year sales and earnings calls for growth of 31.6% and 64.7%, respectively, from the year-ago figures.

US Foods Holding Corp. USFD engages in the marketing, sale and distribution of fresh, frozen and dry food and non-food products to foodservice customers in the United States. USFD currently carries a Zacks Rank #2 (Buy). US Foods Holding delivered a trailing four-quarter earnings surprise of 1.5%, on average.

The Zacks Consensus Estimate for US Foods Holding’s current fiscal-year sales and earnings implies growth of 5.1% and 16.3%, respectively, from the year-ago figures.

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