B&G Foods, Inc. BGS is reorganizing itself into four business units to lay clear focus and expectations within its portfolio. The move will also aid the company in driving organic and acquisition growth. The four newly-formed business segments include — Spices & Seasonings, Meals, Frozen & Vegetables and Specialty.
Spices & Seasonings segment will represent nearly 18% of the company’s net sales and include the Dash, Spice Islands, Weber and Tone’s brands, among others. B&G Foods’ Meals unit will reflect approximately 22% of net sales. The particular unit will comprise several brands like the Ortega, Cream of Wheat and Maple Grove Farms, to name a few. The Frozen & Vegetables segment will include brands like Green Giant shelf stable, Green Giant frozen and Le Sueur brands to contribute roughly 27% to the company’s net sales. The fourth unit, Specialty, will contribute approximately 33% to net sales. The unit will include brands like the Clabber Girl, Crisco, Back to Nature and Bear Creek, among others.
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Further, management highlighted that it remains on track with its priorities and goals. In this regard, management is committed to countering the ongoing inflationary environment and undertaking pricing actions. It is on track to enhance organic growth performance while capitalizing on the post-pandemic trends of work-from-home. B&G Foods is constantly looking out for prudent acquisitions that are accretive to the portfolio. The company is committed to undertaking cost savings and productivity efforts to remove non-value-added costs and mitigate inflation while solidifying its margins and cash flows for the long run.
Apart from these, B&G Foods unveiled various leadership appointments effective Aug 1, 2022. The newly-formed business unit structure will support the company in enhancing the clarity and speed of decision-making to accelerate growth.
B&G Foods is battling major cost hurdles, which was witnessed in its first-quarter fiscal 2022 numbers, wherein the bottom line missed the Zacks Consensus Estimate and declined year over year. During its first-quarter earnings release, management lowered its adjusted EBITDA and earnings per share (EPS) view for the full year due to input cost inflation and supply-chain bottlenecks. While it is undertaking saving and pricing actions to counter cost inflation, it is yet to be seen how effective these initiatives turn out.
Shares of this Zacks Rank #5 (Strong Sell) company have slumped 17.2% in the past three months compared with the industry’s 3.9% decline.
3 Solid Food Stocks
Some better-ranked stocks are Sysco Corporation SYY, United Natural Foods UNFI and Medifast MED.
Sysco, which engages in marketing and distributing various food and related products, carries a Zacks Rank #2 (Buy). SYY has a trailing four-quarter earnings surprise of 9.1%, on average. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Zacks Consensus Estimate for Sysco’s current financial year sales and EPS suggests growth of 32.6% and 124.3%, respectively, from the year-ago reported number.
United Natural Foods distributes natural, organic, specialty, produce and conventional grocery and non-food products. UNFI currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for UNFI’s current financial year sales and EPS suggests growth of 7.2% and 4.9%, respectively, from the year-ago period’s reported figures. United Natural Foods has a trailing four-quarter earnings surprise of 29.9%, on average.
Medifast, which manufactures and distributes weight loss, weight management, healthy living products and other consumable health and nutritional products, currently carries a Zacks Rank #2. MED has a trailing four-quarter earnings surprise of 12.9%, on average.
The Zacks Consensus Estimate for Medifast’s current financial year sales and EPS suggests growth of almost 19% and 13.4%, respectively, from the year-ago reported figure.
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