US-based B&G Foods has said it is eyeing M&A opportunities after first-quarter results that included a fall in sales and earnings.
In a post-results call with analysts, newly appointed chief executive officer Kenneth Romanzi said: “We remain committed and ready to add to our business through accretive acquisitions. That is what built this great company and that strategy will continue to fuel our growth in the future.”
And in response to a question later in the call, Romanzi added: “We are actively looking for M&A ideas as we always have in the past.”
B&G Foods, which owns brands including Green Giant vegetable products, last made an acquisition in July 2018 when it paid US$32m to peer TreeHouse Foods for its McCann’s Irish Oatmeal brand.
But it is a sale rather than a purchase that appeared to have the most impact on B&G Foods’ results with the company blaming the divestment of its Pirate Brands natural snacking business – sold to confectionery giant Hershey for $420m last September – for its woes.
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First-quarter net sales were down from $431.7m a year ago to $412.7m this time around. Former Danone man Romanzi said the sale of Pirate Brands “reduced our financial performance for the first quarter”.
The company’s net income was also down on a year-on-year basis at $16.8m, compared to $20.5m in 2018.
More positive news came from the net sales of Green Giant products which increased by $6.9m, or 5.4%, in the first quarter of 2019 on a like-for-like basis.
Romanzi said further innovation is planned for Green Giant. “We are very encouraged by the successful launch in the latest generation of innovation, such as Green Giant Cauliflower Pizza Crust, Green Giant Protein Balls and Little Greens Sprouts Organics. And we are very much looking forward to announcing our next wave of Green Giant frozen innovation later this year, as we continue to facilitate America’s healthy eating habits,” he said.
B&G Foods is in the midst of a cost-saving inventory reduction plan. It said it reduced inventory from $455.4m at the end of the first quarter of 2018 to $401.4m at the end of the fourth quarter of 2018, and further reduced inventory to $375.4m at the end of the first quarter of 2019.
At the beginning of March, B&G Foods said is planning for further price increases and more work on cost savings to support sales growth and underlying earnings expansion in 2019.
Shares in B&G Foods, which released its first-quarter figures after the stock market closed yesterday, were down 8.58% today at 12:22 ET at $22.81.