B&G Foods revised its share guidance lower after booking a decline in first-half profit, and like many big-brand names noted challenging business conditions.
The New Jersey-based owner of the Green Giant range of products saw net income fall to US$54.8m in the six months to 1 July, from $63.4m a year earlier, based on Generally Accepted Accounting Principles, or GAAP. The company said yesterday (3 August) adjusted diluted earnings per share came in at $0.82, down from $1.04 in the first half of 2016.
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Share guidance for the full year was revised to $2.03-$2.17 (from $2.13-$2.27), even as first-half net sales rose 19% to $786m. B&G noted the spices and seasoning business it acquired in November from Associated British Foods and US pasta sauces maker Victoria Fine Foods, purchased in December, contributed $130.6m and $20.4m, respectively, to the overall sales results.
However, B&G’s “base business” net sales dropped 3.6% to $635m, attributable to decreases in unit volume of $21.5m and net pricing of $2.2m, the company said. Adjusted EBITDA, which excludes the “impact of acquisition-related inventory step-up, other acquisition-related expenses, and loss on sale of assets”, declined 2.5% to $170.2m.
After experiencing a challenging second quarter, the US company also lowered its full-year adjusted EBITDA guidance to a range of $352.5m to $367.5m (from $360-$375m), while it reaffirmed predicted net sales of $1.64bn-$1.67bn.
In reflection of the downgrades to B&G’s forecasts, president and CEO Robert Cantwell said: “The second quarter of 2017 was a difficult one, as we continued to struggle with the many challenges facing our industry. The quarter saw continued strong growth in our Green Giant frozen products driven by the innovation we launched in the fourth quarter of 2016.”
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