B&G Foods Hits 52-Week High On Strong Outlook

Shares of B&G Foods, Inc. (NYSE:BGS) touched a new 52-week high of $44.84 on Jun 6. Shares have been up 32.4% since the company raised its outlook for fiscal 2016 on Apr 28. The company also announced impressive first quarter 2016 results.

The New Jersey-based shelf-stable and frozen food company eventually closed the trading session at $44.31, yielding a solid year-to-date return of 32.3%.

Growth Drivers

Bullish Outlook for 2016

B&G Foods raised its 2016 outlook for net sales, adjusted EBITDA and earnings per share at the first quarter conference call. B&G Foods acquired Green Giant brand from General Mills, Inc. (NYSE:GIS) in Nov 2015. The Green Giant acquisition resulted in better-than-expected profitability in the first quarter of 2016, which led management to raise its expectation. The integration of Green Giant is under process and on schedule. The company has a huge pipeline under the brand.

The company expects full year 2016 adjusted earnings per share in a range of $2.05 to $2.15, which is significantly higher than the prior expectation of $1.98 and $2.09. The guidance also marks a year-over-year increase over $1.53 per share reported in 2015.

Net sales are expected between $1.39 billion to $1.42 billion compared with the prior expectation of $1.38 billion and $1.42 billion. This is higher than $966.4 million reported in 2015.

Adjusted EBITDA is expected to range between $310.0 million to $320.0 million, significantly higher than the prior expected range of $294.0 million to $304.0 million.

First Quarter 2016 Results Strong

Adjusted earnings per share of 65 cents per share surpassed the Zacks Consensus Estimate of 51 cents by 27.5%. Earnings increased 71.1% from the year-ago figure, owing to higher profit. Though revenues missed the estimate, it increased a whopping 62.6% year over year driven by strong sales of the Mama Mary’s brand, acquired in Jul 2015, and Green Giant acquired in Nov 2015. The company also reported a 79.4% increase in adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) during the quarter, driven by an increase in prices.

B&G Foods sports a Zacks Rank #1 (Strong Buy).

Other Stocks to Consider

Investors interested in the consumer staples space may also consider Lancaster Colony Corporation (NASDAQ:LANC) and Post Holdings, Inc. (NYSE:POST) , both carrying the same Zacks Rank as B&G Foods.


GENL MILLS (GIS): Free Stock Analysis Report

B&G FOODS CL-A (BGS): Free Stock Analysis Report

POST HOLDINGS (POST): Free Stock Analysis Report

LANCASTER COLON (LANC): Free Stock Analysis Report

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