PARSIPPANY, NJ — Inflation and supply chain recovery proved challenging once again for B&G Foods, Inc. in the first quarter of fiscal 2022.
Net income at B&G Foods in the first quarter ended April 2 totaled $23.66 million, equal to 34¢ per share on the common stock, down 12% from $26.88 million, or 42¢ per share, in the same period a year ago. B&G said the most recent quarter included a $7.1 million gain related to the sale of assets.
Net sales increased 5% to $532.41 million from $505.13 million.
On May 6, a day after earnings were released, shares of B&G closed at $24.37 on the New York Stock Exchange, down nearly 13% from the close of $27.90 on May 4, the day before earnings were issued.
“Our first quarter was heavily impacted by severe input cost increases across large portions of our portfolio coupled with continued industrywide supply chain disruptions that, while improving, have still been a drag on the business,” Bruce C. Wacha, chief financial officer, said during a May 5 conference call with analysts. “The negative pressures have been offset in part by our pricing initiatives that include list price increases, trade spend reductions, product weight-outs, and the impact of product mix. These initiatives that we have taken to improve net pricing have been designed to be equally as large. However, due to the lag effect on implementation, our margins have been compressed in the short term. We expect similar levels of margin compression in the second quarter due to the input cost increases.”
Mr. Wacha said net sales of Cream of Wheat increased by $2.8 million, or 15.5%, during the first quarter. He said the brand benefited from price and volume, driven in part by continued strong demand across the brand’s portfolio, particularly for Cream of Rice products.
Meanwhile, net sales of Ortega increased by $3.6 million, or 9.3%, lifted by increased production capacity from a new taco sauce line in Hurlock, Md. Strong growth also was noted in Maple Grove Farms, which saw sales increase by $1.2 million, or 6%, Mr. Wacha said.
Within the Green Giant brand, net sales of shelf-stable products rose by $3.9 million, or 11.5%, while net sales of frozen products fell $700,000, or 0.7%, during the quarter.
Net sales in the company’s spices and seasonings business fell $15.1 million, or nearly 15%, in the first quarter compared with a year ago, but remained up more than 20% from the first quarter of 2020, Mr. Wacha said.
“We have made significant investments in our Ankeny, Iowa, spices and seasonings facility and we are beginning to see meaningful improvements in our fill rates for this important category of our business,” he said. “We expect that our improvements will better enable us to maximize our opportunity in the spices and seasonings category this year.”B&G Foods revised its full-year fiscal 2022 adjusted EBITA guidance to a range of $348 million to $358 million, down from early guidance of $358 million to $368 million. Net sales guidance for the full year was raised to a range of $2.10 billion to $2.14 billion, up from earlier guidance of $2.07 billion to $2.13 billion.