B&G Foods (NYSE:BGS) reported a first-quarter loss as divestiture-related charges weighed on results, while management said the company is making progress reshaping its portfolio toward higher-margin businesses and reducing leverage.
On the company’s fiscal first-quarter 2026 earnings call, Chief Executive Officer Casey Keller said B&G Foods completed the divestiture of its Green Giant U.S. frozen business to Seneca Foods Corporation on March 2 and acquired the College Inn and Kitchen Basics broth and stock businesses from Del Monte Foods on March 19. Keller described the Green Giant U.S. frozen sale as “the largest piece” of the company’s portfolio transformation.
“This is the largest piece in our portfolio transformation that is resulting in stronger focus, simplification, greater synergies, and higher margins across the B&G Foods portfolio,” Keller said.
The company also previously announced the planned divestiture of Green Giant Canada, which remains subject to Canadian regulatory approval. Keller said B&G expects that transaction to close during the second quarter of fiscal 2026, subject to regulatory approval and other customary closing conditions. The pending Green Giant Canada divestiture is not included in the company’s current guidance.
First-quarter sales declined, but base business improved
Chief Financial Officer Bruce Wacha said B&G Foods generated first-quarter net sales of $408.9 million, down 3.9% from $425.4 million in the prior-year period. The decline was primarily attributable to divestitures, including Green Giant U.S. frozen, Le Sueur U.S. and Don Pepino.
Wacha said the Green Giant U.S. frozen business, which B&G owned for only two months of the quarter, contributed $27.2 million less in net sales than in the year-ago quarter. Don Pepino and Le Sueur, both divested in 2025, had contributed $10.6 million of net sales in the first quarter of 2025.
Those declines were partially offset by $8.5 million in net sales from a new Green Giant U.S. frozen contract manufacturing agreement and $2.9 million from the newly acquired College Inn and Kitchen Basics brands during B&G’s first two weeks of ownership.
Base business net sales increased 2.8% to $365.1 million from $355.2 million a year earlier. Wacha said the increase reflected volume gains of $6.6 million, or 1.9%, higher net pricing and product mix of $1.6 million, or 0.5%, and a $1.7 million benefit from foreign currency.
Keller said the first quarter showed “significant improvement” in base business trends compared with a weaker first quarter of fiscal 2025, which had been affected by trade inventory reductions.
Loss driven by non-cash charges
B&G Foods reported a net loss of $32.5 million, or $0.41 per diluted share, compared with net income of $0.8 million, or $0.01 per diluted share, in the first quarter of 2025. Wacha said the loss was primarily attributable to a $36.3 million non-cash loss on the sale of assets related to the Green Giant U.S. frozen divestiture, a $5.8 million non-cash loss on disposals and impairment of property, plant and equipment, and acquisition, divestiture-related and other non-recurring expenses.
Adjusted net income was $6.8 million, or $0.08 per adjusted diluted share, compared with adjusted net income of $3.4 million, or $0.04 per adjusted diluted share, in the prior-year period.
Adjusted EBITDA was $57.6 million, or 14.1% of net sales, compared with $59.1 million, or 13.9% of net sales, in the first quarter of 2025. Gross profit was $79.9 million, or 19.5% of net sales, while adjusted gross profit was $84.6 million, or 20.7% of net sales.
Spices business leads segment performance
The Spices & Flavor Solutions business unit posted a 9.1% increase in net sales to $100.1 million, driven by higher volumes, higher net pricing and favorable product mix. Segment adjusted EBITDA for Spices & Flavor Solutions increased 13.1% from the prior-year quarter. Keller said the business benefited from growth in fresh food and proteins, as well as strength in club and foodservice channels.
Meals net sales increased 0.9% to $107.1 million. The College Inn and Kitchen Basics acquisition added about $2.9 million of sales during the quarter, while higher pricing and mix helped offset modestly lower volumes. However, Meals segment adjusted EBITDA decreased by about $5 million due to unfavorable cost comparisons in certain raw materials and manufacturing expenses, as well as higher cost allocations following the Green Giant U.S. frozen divestiture. Wacha said B&G also increased trade spending and marketing expenses for brands including Ortega.
Specialty net sales declined 2.7% to $130.8 million, primarily due to the Don Pepino divestiture. Wacha said base business net sales for Specialty were essentially flat. Specialty segment adjusted EBITDA declined by $7.4 million, reflecting the Don Pepino sale, higher raw material and manufacturing costs, tariffs and higher allocated costs.
Green Giant Canada net sales rose 16.4% to $30.1 million. Wacha said the new Green Giant U.S. frozen contract manufacturing arrangement has a cost-plus structure and is expected to provide “a modest but stable profit stream going forward.”
Guidance raised for acquisition, dividend cut to support debt reduction
B&G Foods updated its fiscal 2026 outlook to reflect the addition of College Inn and Kitchen Basics. The company now expects:
- Net sales of $1.735 billion to $1.775 billion;
- Adjusted EBITDA of $275 million to $290 million;
- Adjusted EBITDA margin of approximately 15.8% to 16.3%;
- Adjusted diluted earnings per share of $0.575 to $0.675.
Wacha said the guidance includes the impact of the Don Pepino, Le Sueur U.S. and Green Giant U.S. frozen divestitures, the Green Giant U.S. frozen contract manufacturing agreement and the College Inn and Kitchen Basics acquisition. It does not include the pending Green Giant Canada divestiture, potential refinancing activity or significant changes in inflation, tariffs or geopolitical conflicts.
The company also announced that its board reduced the quarterly dividend by 50% to $0.095 per share, or $0.38 per share annually, beginning with the dividend payable July 30, 2026, to shareholders of record as of June 30, 2026.
Wacha said the reduction is expected to provide about $30 million of additional annual cash, which the company intends to use to repay long-term debt and for other business purposes. Keller said B&G wants at least 50% of excess cash going toward debt reduction in the current interest rate environment.
Net debt to pro forma adjusted EBITDA before share-based compensation and extraordinary tariffs was 6.07 times at the end of the quarter, down from 6.57 times at the end of the fourth quarter of 2025. Wacha said the company remains on track to reduce leverage to approximately 6 times or less by midyear, with the Green Giant Canada sale expected to reduce leverage by another roughly quarter turn if completed.
Management monitoring soybean oil and energy costs
Executives repeatedly highlighted soybean oil and energy costs as key risks. Keller said soybean oil is closely linked to crude oil because of its relationship to biofuels and is “the one we’re watching pretty closely.” He said soybean oil was elevated, near levels seen in 2022, and that B&G would consider pricing if costs remain high.
Wacha said energy costs also flow through logistics and some packaging, though the company is waiting to see whether higher costs persist. Keller said B&G has covered some expected increases through productivity and cost savings, but added that broad pricing across the portfolio is not currently expected unless energy costs remain elevated for an extended period.
In response to analyst questions about consumption trends, Keller said tracked channel data now represents less than 60% of B&G’s portfolio following the Green Giant U.S. frozen divestiture. He said foodservice, private label and Canadian businesses are not fully reflected in U.S. measured channel data and have been performing better, with some non-measured channels growing at mid-single-digit rates.
Keller said B&G’s long-term objectives remain improving base business net sales trends toward flat to 1% growth, reshaping the portfolio for higher margins and cash flow, and reducing net leverage below 5 times through divestitures and excess cash flow.
About B&G Foods (NYSE:BGS)
B&G Foods, Inc is a packaged foods holding company that develops, markets and distributes a diversified portfolio of branded shelf-stable and frozen food products. Headquartered in Parsippany, New Jersey, the company serves retail and foodservice customers across the United States and Canada. Through its network of manufacturing facilities, third-party co-packers and distribution partners, B&G Foods supplies grocery chains, mass merchandisers, club stores and e-commerce platforms.
The company's product portfolio spans multiple categories, including vegetables, beans, soups, sauces and condiments, snacks, cereals and refrigerated or frozen offerings.
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