B&G Foods (BGS) Q2 FY26 earnings call: guidance and Q&A

Earnings call· Jun 2026 (Q2 FY26)· Consumer Staples· Aug 11, 2026

Source: earnings call transcript

Executive summary

B&G Foods Q2 FY26 — Portfolio Reshaping and Reaffirmed Guidance Amidst CEO Transition

B&G Foods reported Q2 FY26 results reflecting ongoing portfolio reshaping through strategic divestitures and acquisitions, alongside the appointment of a new CEO, Rob Mills, focused on execution and digital transformation. The company reaffirmed its full-year guidance, anticipating continued improvement in financial performance despite a challenging industry backdrop and volume declines in its base business.

Highlights

Adjusted EBITDA increased to $60.4 million (15.8% of net sales) in Q2 FY26 from $58 million (13.7%) in Q2 FY25, driven by strategic M&A and tariff refunds.
Adjusted net income grew to $4.9 million ($0.06 per share) in Q2 FY26 from $2.9 million ($0.04 per share) in Q2 FY25.
Adjusted gross profit as a percentage of net sales improved to 21.8% in Q2 FY26 from 21% in Q2 FY25, benefiting from higher-margin acquisitions and lower-margin divestitures.
SG&A expenses decreased by $6.6 million or 14% to $40.6 million, improving as a percentage of net sales by 0.5 percentage points to 10.6%.
Spices and Flavor Solutions segment adjusted EBITDA increased by $7 million or 29%, driven by pricing, improved cost environment, and tariff refunds.

Concerns

Net sales decreased by $41.1 million or 9.7% to $383.3 million in Q2 FY26, primarily due to divestitures.
Base business net sales decreased by $10.2 million or 2.9%, driven by a 4.3% volume decline.
Specialty segment adjusted EBITDA decreased by $8.9 million, impacted by divestitures, unfavorable raw material costs, and increased manufacturing expenses.
Net interest expense increased by $2.7 million or 7.5% to $38.5 million due to higher average long-term debt and the 11% interest rate on new notes.
The timing of the Fourth of July holiday negatively impacted Q2 FY26 net sales by approximately $5 million to $7 million.

Guidance & targets

Category	Target	Timeline	Confidence
Fiscal 2026 Net Sales	$1.735 billion to $1.775 billion high materiality	FY26 · 2026	High
Fiscal 2026 Adjusted EBITDA	$275 million to $290 million high materiality	FY26 · 2026	High
Fiscal 2026 Adjusted EBITDA as a percentage of net sales	15.8% to 16.3% high materiality	FY26 · 2026	High
Fiscal 2026 Adjusted Diluted Earnings Per Share	$0.575 to $0.675 per share high materiality	FY26 · 2026	High
Fiscal 2026 Interest Expense	$157.5 million to $162.5 million medium materiality	FY26 · 2026	High
Fiscal 2026 Cash Interest	$150 million to $155 million medium materiality	FY26 · 2026	High
Fiscal 2026 Depreciation Expense	$40 million to $45 million medium materiality	FY26 · 2026	High
Fiscal 2026 Amortization Expense	$17 million to $19 million medium materiality	FY26 · 2026	High
Fiscal 2026 Cash Taxes	$5 million or less medium materiality	FY26 · 2026	High
Fiscal 2026 Effective Tax Rate	26% to 27% medium materiality	FY26 · 2026	High
Fiscal 2026 Capital Expenditure	Lower end of $30 million to $35 million medium materiality	FY26 · 2026	High
Long-term Base Business Net Sales Growth	0% to 2% high materiality	Long-term	High

Segment performance

Segment	Revenue	YoY	QoQ	Margin
Spices and Flavor Solutions Net sales increased slightly from $96.5 million in Q2 FY25. The increase in segment adjusted EBITDA was primarily due to pricing, improved cost environment for spices, and tariff refunds. Segment adjusted EBITDA increase: 29%Net pricing and product mix: increasedCost environment: improved relative to prior yearTariff refunds: received from U.S. government	$96.6 million	0.1%	—	$7 million increase
Meals Net sales increased from $104.1 million in Q2 FY25. The acquisition of Collagen and Kitchen Basics brands primarily drove the increase in net sales and segment adjusted EBITDA, offsetting declines in certain other brands. Acquisition of Collagen and Kitchen Basics brands: $13.2 million net sales	$110.5 million	6.2%	—	$0.1 million increase
Specialty Net sales decreased from $134.9 million in Q2 FY25. The decrease in segment adjusted EBITDA was due to the Don Pepino divestiture, unfavorable raw material costs, increased manufacturing expenses, and investment in Crisco oil pricing. Don Pepino divestiture: $1.8 million net sales in Q2 FY25Crisco oil pricing: investment, benefited from increased volumes	$128.9 million	-4.4%	—	$8.9 million decrease
Green Giant Canada Net sales increased from $22.9 million in Q2 FY25. This business is classified as an asset held for sale, with divestiture pending.	$23.4 million	2.4%	—	—
Green Giant U.S. Frozen contract manufacturing business Generated this revenue in its first full quarter of operation following the sale of the Green Giant U.S. Frozen business. The team is looking to build this business, add new customers, and increase volumes.	$23.9 million	—	—	Modestly profitable

Deals & partnerships

Green Giant U.S. Frozen Sale of the Green Giant U.S. Frozen business

Divestiture occurred in early March 2026 as part of portfolio reshaping efforts to exit low-margin, working capital-intensive businesses.

Lasor U.S. shelf-stable Sale of Lasor U.S. shelf-stable brands

Divestiture occurred in the summer of 2025 as part of portfolio reshaping efforts.

Don Pepino Sale of the Don Pepino brand

Divestiture occurred in the summer of 2025 as part of portfolio reshaping efforts. Contributed $1.8 million to net sales in Q2 FY25.

Collagen and Kitchen Basics brands Acquisition of higher-margin, cash-generative brands

Acquisition completed in late March 2026. These brands are expected to provide incremental growth and profitability.

New owner of Green Giant U.S. Frozen business Contract manufacturing agreement for Green Giant U.S. Frozen products

Commenced simultaneously with the Green Giant U.S. Frozen divestiture in early March 2026. B&G Foods produces products at its vegetable manufacturing facility in Mexico for the new owner.

Green Giant Canada Sale of Green Giant Canada business

Currently classified as an asset held for sale for accounting purposes. The divestiture has not yet closed and is expected to complete during the third quarter.

Risks & headwinds

Fourth of July holiday timing impact on net sales Q2 FY26

$5 million to $7 million net sales loss

Lapping of 53rd week benefit from prior fiscal year Q4 FY26

$18 million in net sales

Inflation in input costs Ongoing

Diesel fuel oil, vegetable oil, spices

Mitigation:Expects to cover inflation where possible through pricing actions (e.g., Crisco).

Acquisition/divestiture-related and nonrecurring expenses Q2 FY26

$9.7 million

Mitigation:Includes organizational restructuring efforts to reduce cost overhang related to divestitures.

Geopolitical and macro demand disruption FY26 and beyond

Potential impact from conflicts in Eastern Europe, Middle East, Latin America; significant changes in inflation/tariff policies

Mitigation:Guidance reflects only known factors and does not factor in significant changes from these risks.

Stranded costs from recent divestitures Ongoing, reducing into early Q3 FY26

Impact on overhead structure

Mitigation:Taking steps to reduce ongoing SG&A commitments to better reflect the size of the business.

Shift in spice brands from branded to partner brands Ongoing

Losing Tones distribution, replaced by B&G providing private label distribution

Mitigation:Company aims to improve performance in these brands.

Consumption softness and mispricing for Collagen brand Current

Softness in consumption, mispriced under prior ownership

Mitigation:Company is fixing pricing and looking forward to a strong holiday season.

What to watch in Q3 FY26

Green Giant Canada Divestiture Completion

Q3 FY26

Current Pending

Target Closed

Why it matters

Completion will finalize portfolio reshaping and impact the balance sheet, including debt reduction.

We expect the Green Giant Canada divestiture to close during the third quarter and look forward to providing an update after the divestiture has been completed.

Find out whether BGS delivers this. Inve re-checks your case every morning.

Q&A highlights

How much did the tariff refund benefit Q2 EBITDA, and will there be more to come for the full year?

Management stated the Q2 benefit was "relatively modest" and less than half of the total $8M-$9M tariff exposure where they were the direct importer. They expect more refunds throughout the year and plan to invest some back into the business.

“We haven't disclosed the number. It's relatively modest. If you go back to kind of 2025 results and as we articulated then, we have about $8 million to $9 million of total incremental tariff exposure. That included tariffs where we were the direct importer of record.and where we were not the importer of record. Where we were the importer of record is about a little bit less than half of that, and that's largely what we got back in the second quarter.”

asked by Andrew Lazar · answered by Bruce Wacha

2 min read 8 chapters

Detailed narrative

CEO Transition and Strategic Direction

Rob Mills has been appointed as the new Chief Executive Officer, bringing eight years of board experience and extensive operating expertise from Tractor Supply Company. His immediate focus will be on strengthening execution, maximizing core brands, improving productivity and cash generation, and accelerating strategies for sustainable growth. Mills' background in digital transformation, data, and AI is expected to modernize operations and enhance decision-making.

Portfolio Reshaping Initiatives

B&G Foods has actively reshaped its portfolio over the past 12 months, divesting low-margin, working capital-intensive businesses such as Green Giant U.S. Frozen, Lasor U.S. shelf-stable, and the Don Pepino brand. Concurrently, the company acquired higher-margin, cash-generative brands like Collagen and Kitchen Basics. The divestiture of Green Giant Canada is pending and expected to close in Q3 FY26.

Q2 FY26 Performance Overview

Despite a 9.7% decrease in net sales to $383.3 million in Q2 FY26, primarily due to divestitures, the company demonstrated improved profitability. Adjusted EBITDA grew to $60.4 million (15.8% of net sales) from $58 million (13.7%) in Q2 FY25. Adjusted gross profit as a percentage of net sales also improved to 21.8%, benefiting from strategic M&A and tariff refunds.

Base Business Trends and Challenges

Base business net sales decreased by $10.2 million or 2.9% in Q2 FY26, driven by a 4.3% volume decline, partially offset by a 1.4% increase from net pricing and product mix. The timing of the Fourth of July holiday negatively impacted Q2 net sales by an estimated $5 million to $7 million. Year-to-date base business net sales remained essentially flat.

Cost Management and Efficiency

Selling, general, and administrative (SG&A) expenses decreased by $6.6 million or 14% to $40.6 million, improving to 10.6% of net sales. The company is actively working to reduce ongoing SG&A commitments to minimize stranded costs resulting from recent divestitures and to align overhead with the current business size, with reductions expected into early Q3.

M&A Impact and Outlook

The acquisition of Collagen and Kitchen Basics brands contributed approximately $13.2 million to Meals segment net sales and positively impacted overall gross margin. The newly commenced Green Giant U.S. Frozen contract manufacturing business generated $23.9 million in net sales in its first full quarter of operation and is modestly profitable, with plans to expand its customer base and volumes.

Inflation and Pricing Strategy

Inflation, particularly in diesel fuel oil and vegetable oil, continues to be a factor, though slightly below peak levels. The company expects to implement pricing actions where possible to cover these costs, referencing previous successful adjustments for Crisco. Consumer elasticity is noted as a consideration given current economic pressures.

Non-Measured Channels and Brand Performance

Non-measured channels, including Canada and foodservice, continue to exhibit strong growth, helping to offset challenges in regular track channels. While hot breakfast brands like Cream of Wheat are performing well, the company aims to improve overall retail brand business performance, addressing shifts in spice brands from branded to partner brands.

Summary of the company's earnings call; see how call summaries are prepared. Not investment advice.