PARSIPPANY, N.J. — The launch of Green Giant Veggie Spirals and other recent frozen innovation drove top-line growth for B&G Foods, Inc. in the recent quarter. The company is planning to expand the brand’s portfolio with “a number of new items in three new frozen categories later this fall, including a new line of organic vegetables,” said Robert C. Cantwell, president and chief executive officer, during an Aug. 2 earnings call.
Net income for the second quarter ended June 30 was $7,976,000, equal to 12c per share on the common stock, down from $22,061,000, or 33c, in the prior-year period. Net sales totaled $388,378,000, up from $361,676,000 the year before.
“We had very strong top-line growth in the second quarter, with our net sales up 7.4% and our base business net sales up 3.1%, which is outpacing our initial expectations for the full year,” Mr. Cantwell said. “Net sales of Green Giant frozen products grew by 19.7%, the fifth consecutive quarter of double-digit growth. Pirate Brands also had a strong quarter, with net sales up 54.6%. Other key brands in our portfolio, including Cream of Wheat, Ortega and Victoria, also performed well during the first half of the year.
“We generated $74.4 million of adjusted EBITDA in the second quarter, a decrease of $3.8 million compared to the second quarter of last year, which was expected due primarily to industry-wide increases in freight costs, and the timing of our price increases, which were not fully implemented until late in the quarter. Supportive of our full-year guidance, we expect to see the full benefit of our price increases and additional benefit from our cost-savings initiatives in the second half of the year. In addition, we believe the rate of increase in freight costs has begun to moderate.”
While the company has seen continued strength in the Green Giant frozen business, the brand’s canned vegetable performance hasn’t fared as well. In the quarter, Green Giant shelf-stable net sales declined nearly 37% due to lost distribution at a large retailer.
“The Green Giant canned business is growing, not by a lot, but a couple of per cent is meaningful outside of that one retailer,” Mr. Cantwell said. “...Green Giant is still a meaningful canned business. I mean, it’s not where we’re focusing our major efforts, and all of our innovation focus has been driven toward certainly the frozen.”
Net income for the first six months of the year was $28,523,000, or 43c per share, down from $54,825,000, or 82c, on net sales of $820,107,000, up from $773,983,000.