B&G Foods Inc. (BGS) delivered a mixed second-quarter report on Monday, with revenue falling short of Wall Street expectations while profitability metrics improved, sending shares up nearly 3% as investors focused on the company's reaffirmed full-year guidance.
The Parsippany, New Jersey-based food manufacturer posted net sales of $383.3 million for the quarter ended June 28, 2026, a 9.7% decline from $424.4 million in the same period last year and below the consensus estimate of $395 million. The top-line contraction was primarily attributable to recent divestitures, including the Green Giant U.S. frozen business, Le Sueur U.S., and Don Pepino brands, partially offset by the College Inn and Kitchen Basics acquisition.
Adjusted earnings per share came in at $0.06, up 50% from $0.04 a year earlier but below the $0.09 analysts had projected. However, the company's fiscal 2026 revenue guidance midpoint of $1.755 billion sits slightly above the consensus estimate of $1.736 billion, and its adjusted EPS midpoint of $0.625 exceeds the $0.56 consensus, providing a supportive backdrop for the stock's positive reaction.
"Our second quarter results reflect the discipline we have brought to reshaping B&G Foods' portfolio," said Bruce Wacha, Executive Vice President of Finance and Chief Financial Officer. "Following the divestiture of our Green Giant U.S. frozen business and the acquisition of the College Inn and Kitchen Basics brands, we grew adjusted EBITDA and expanded our adjusted EBITDA margin in the second quarter as compared to the second quarter of last year."
Adjusted EBITDA rose 4.2% to $60.4 million, with the margin expanding to 15.8% from 13.7% in the prior-year period. Gross profit totaled $79.6 million, or 20.8% of net sales, compared to $87 million, or 20.5%, a year earlier. On an adjusted basis, gross profit was $83.7 million, representing 21.8% of net sales versus 21% in Q2 2025.
SG&A expenses declined 14% to $40.6 million from $47.2 million, reflecting ongoing cost reduction efforts and improved operational efficiency. The company incurred a net loss of $4 million, or $0.05 per diluted share, narrowing from a net loss of $9.8 million, or $0.12 per share, in the year-ago quarter. The loss was driven by $9.7 million in acquisition and divestiture-related expenses.
Base business net sales decreased 2.9% to $346.3 million, driven by a 4.3% decline in volume, partially offset by a 1.4% increase from net pricing and product mix. Wacha noted that base business performance for the first half was essentially flat, in line with the company's plan despite a challenging industry backdrop.
The company's segment results showed significant divergence. The Spices & Flavor Solutions unit posted adjusted EBITDA of $31.1 million, a 29% jump, benefiting from increased pricing, tariff refunds, and lower input costs. Net sales for the segment were essentially flat at $96.6 million.
The Meals segment grew net sales 6.2% to $110.5 million, with the Collagen and Kitchen Basics acquisition contributing approximately $13.2 million. The Specialty segment, however, saw net sales decline 4.4% to $128.9 million, with adjusted EBITDA falling by $8.9 million to $23.7 million due to higher oil input costs for the Crisco brand, unfavorable raw material costs, and increased manufacturing expenses.
Green Giant Canada net sales increased 2.4% to $23.4 million, while the new Green Giant U.S. Frozen contract manufacturing business generated $23.9 million in net sales in its first full quarter of operation, providing what management described as a modest but consistent EBITDA contribution.
Key Financial Metrics: Q2 2026 vs. Q2 2025
Note: Adjusted figures exclude acquisition and divestiture-related expenses and other one-time items.
Leadership Transition and Strategic Focus
The company recently appointed Rob Mills as CEO, bringing extensive operating experience and a focus on digital transformation. Wacha indicated that improving the performance of the retail branded business is a key focus for the new chief executive, particularly in tracked retail channels where the company has faced headwinds.
Wacha acknowledged that non-measured channels, including Canada, foodservice, and private brand relationships within spices, continue to show strong double-digit growth, offsetting weakness in traditional tracked channels. However, he emphasized the need for improvement across the branded portfolio.
On the Collagen and Kitchen Basics acquisitions, Wacha said sales are tracking ahead of the company's internal forecasts despite some softness in collagen consumption. He characterized Collagen as a "#2 Northeast regional brand that was mispriced under prior ownership," noting the company is addressing pricing issues. Kitchen Basics, he added, "continues to surprise us positively," with the true integration test coming during the winter soup season.
Wacha identified fuel and vegetable oil as the largest areas of inflation so far this year, though both are running slightly below peak levels from earlier in the year. He noted some inflationary pressure emerging in spices as well. The company has not observed competitors taking pricing on fuel costs but has seen pricing actions within vegetable oil.
Regarding tariff refunds, Wacha said the company had approximately $8 million to $9 million of total incremental tariff exposure, of which it was the importer of record for slightly less than half. The portion recovered in Q2 was relatively modest, with additional refunds expected throughout the remainder of the year.
The timing of the Fourth of July holiday negatively impacted net sales by approximately $5 million to $7 million in the quarter.
The pending divestiture of Green Giant Canada remains subject to regulatory approval, with Wacha expressing eagerness to complete the transaction. "We're chomping at the bit to get it completed, but it takes time," he said, adding that the company expects the deal to close during the third quarter.
Wacha noted that proceeds from the sale will fluctuate with inventory levels. The transaction was announced near peak inventory levels in the third quarter of last year, while Q2 2026 represents a trough period. As the company enters pack season, inventory levels will rise, likely pushing proceeds closer to the September 2025 valuation figure.
Wacha indicated that while the company has completed significant portfolio reshaping over the past 18 months, including the Green Giant strategic review, there is always more work to be done. He said the company will continue to evaluate divestiture opportunities opportunistically but does not expect major transactions in the near term. On the acquisition front, B&G Foods aims to pursue deals similar to Collagen and Kitchen Basics that add incremental growth in sales and profitability.
Net interest expense increased 7.5% to $38.5 million due to higher debt levels and the 11% interest rate on new senior notes, with a 24-day period of double interest expense during refinancing.
Management maintained its full-year outlook across all key metrics. The company projects net sales between $1.735 billion and $1.775 billion, adjusted EBITDA between $275 million and $290 million, and adjusted diluted EPS between $0.575 and $0.675 per share.
Wacha said the guidance assumes base business net sales ranging from flat to down 2%, plus or minus M&A transactions. "We're not looking for anything heroic and feel comfortable where we are," he said, noting the company is lapping a 53rd week from the prior year but remains on pace given year-to-date performance.
Shares of B&G Foods closed up 2.9% on Monday following the earnings release, reflecting investor confidence in the company's margin expansion trajectory and reaffirmed guidance despite the top-line miss.
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