Press Release: B&G Foods To Participate In The Barclays Global Consumer Staples Conference

Wall Street has issued downbeat forecasts for the stocks in this article. These predictions are rare - financial institutions typically hesitate to say bad things about a company because it can jeopardize their other revenue-generating business lines like M&A advisory.

At StockStory, we look beyond the headlines with our independent analysis to determine whether these bearish calls are justified. That said, here is one stock poised to prove Wall Street wrong and two where the outlook is warranted.

Two Stocks to Sell:

B&G Foods (BGS)

Consensus Price Target: $4.50 (6.6% implied return)

Started as a small grocery store in New York City, B&G Foods is an American packaged foods company with a diverse portfolio of more than 50 brands.

Why Do We Steer Clear of BGS?

• Annual sales declines of 3.9% for the past three years show its products struggled to connect with the market
• Performance over the past three years shows each sale was less profitable as its earnings per share dropped by 27.2% annually, worse than its revenue
• High net-debt-to-EBITDA ratio of 7× increases the risk of forced asset sales or dilutive financing if operational performance weakens

At $4.22 per share, B&G Foods trades at 7.2x forward P/E. Read our free research report to see why you should think twice about including BGS in your portfolio.

Figs (FIGS)

Consensus Price Target: $6.42 (-6.4% implied return)

Rising to fame via TikTok and founded in 2013 by Heather Hasson and Trina Spear, Figs is a healthcare apparel company known for its stylish approach to medical attire and uniforms.

Why Are We Out on FIGS?

• Demand for its offerings was relatively low as its number of active customers has underwhelmed
• Projected 3.9 percentage point decline in its free cash flow margin next year reflects the company’s plans to increase its investments to defend its market position
• Shrinking returns on capital from an already weak position reveal that neither previous nor ongoing investments are yielding the desired results

Figs’s stock price of $6.86 implies a valuation ratio of 121.5x forward P/E. Check out our free in-depth research report to learn more about why FIGS doesn’t pass our bar.

One Stock to Buy:

Comfort Systems (FIX)

Consensus Price Target: $767.20 (9.8% implied return)

Formed through the merger of 12 companies, Comfort Systems provides mechanical and electrical contracting services.

Why Do We Love FIX?

• Backlog has averaged 29.5% growth over the past two years, showing it has a pipeline of unfulfilled orders that will support revenue in the future
• Share repurchases have amplified shareholder returns as its annual earnings per share growth of 69.7% exceeded its revenue gains over the last two years
• Returns on capital are growing as management capitalizes on its market opportunities

Comfort Systems is trading at $698.42 per share, or 34.5x forward P/E. Is now a good time to buy? Find out in our full research report, it’s free.

High-Quality Stocks for All Market Conditions

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What Happened?

A number of stocks fell in the pre-market session after markets pulled back amid hotter-than-expected inflation data. The main concern for investors was the July Producer Price Index (PPI), a measure of wholesale inflation. The higher-than-expected reading suggests that companies could face squeezed profit margins due to rising costs. This also reduces the likelihood of the Federal Reserve cutting interest rates, which could further dampen economic activity. Compounding these inflation fears are multiple reports signaling a weakening consumer.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Shelf-Stable Food company Utz fell 6.6%. Is now the time to buy Utz? Access our full analysis report here, it’s free.
• Personal Care company Estée Lauder fell 6.5%. Is now the time to buy Estée Lauder? Access our full analysis report here, it’s free.
• Beverages, Alcohol, and Tobacco company MGP Ingredients fell 3%. Is now the time to buy MGP Ingredients? Access our full analysis report here, it’s free.
• Shelf-Stable Food company B&G Foods fell 4.1%. Is now the time to buy B&G Foods? Access our full analysis report here, it’s free.
• Perishable Food company Beyond Meat fell 3.4%. Is now the time to buy Beyond Meat? Access our full analysis report here, it’s free.

Zooming In On Utz (UTZ)

Utz’s shares are not very volatile and have only had 8 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.

The previous big move we wrote about was 1 day ago when the stock gained 3.4% on the news that markets continued to rally as a surprisingly subdued inflation report fueled hopes for an imminent interest rate cut from the U.S. Federal Reserve. The July Consumer Price Index (CPI) report showed a year-over-year increase of 2.7%, which was slightly below market expectations. This tamer-than-expected inflation data was viewed by investors as a key signal that price pressures are easing. As a result, the market has strengthened its conviction that the U.S. Federal Reserve will implement an interest rate cut in September. The prospect of lower borrowing costs tends to boost corporate profitability and can stimulate economic activity, creating a more favorable environment for consumer-facing companies and fueling a broad-based market rally.

Utz is down 11% since the beginning of the year, and at $13.48 per share, it is trading 27.5% below its 52-week high of $18.60 from September 2024. Investors who bought $1,000 worth of Utz’s shares 5 years ago would now be looking at an investment worth $983.22.

What Happened?

A number of stocks jumped in the afternoon session after markets continued to rally as a surprisingly subdued inflation report fueled hopes for an imminent interest rate cut from the U.S. Federal Reserve. The July Consumer Price Index (CPI) report showed a year-over-year increase of 2.7%, which was slightly below market expectations. This tamer-than-expected inflation data was viewed by investors as a key signal that price pressures are easing. As a result, the market has strengthened its conviction that the U.S. Federal Reserve will implement an interest rate cut in September. The prospect of lower borrowing costs tends to boost corporate profitability and can stimulate economic activity, creating a more favorable environment for consumer-facing companies and fueling a broad-based market rally.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks.

Among others, the following stocks were impacted:

• Perishable Food company Dole jumped 3.8%. Is now the time to buy Dole? Access our full analysis report here, it’s free.
• Shelf-Stable Food company B&G Foods jumped 4.5%. Is now the time to buy B&G Foods? Access our full analysis report here, it’s free.
• Personal Care company Medifast jumped 4.2%. Is now the time to buy Medifast? Access our full analysis report here, it’s free.
• Personal Care company USANA jumped 4.1%. Is now the time to buy USANA? Access our full analysis report here, it’s free.
• Beverages, Alcohol, and Tobacco company MGP Ingredients jumped 3%. Is now the time to buy MGP Ingredients? Access our full analysis report here, it’s free.

Zooming In On B&G Foods (BGS)

B&G Foods’s shares are quite volatile and have had 17 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful but not something that would fundamentally change its perception of the business.

B&G Foods is down 39.7% since the beginning of the year, and at $4.30 per share, it is trading 54% below its 52-week high of $9.34 from September 2024. Investors who bought $1,000 worth of B&G Foods’s shares 5 years ago would now be looking at an investment worth $146.86.

Here at StockStory, we certainly understand the potential of thematic investing. Diverse winners from Microsoft (MSFT) to Alphabet (GOOG), Coca-Cola (KO) to Monster Beverage (MNST) could all have been identified as promising growth stories with a megatrend driving the growth. So, in that spirit, we’ve identified a relatively under-the-radar profitable growth stock benefiting from the rise of AI, available to you FREE via this link.

Packaged foods company B&G Foods fell short of the market’s revenue expectations in Q2 CY2025, with sales falling 4.5% year on year to $424.4 million. The company’s full-year revenue guidance of $1.86 billion at the midpoint came in 0.5% below analysts’ estimates. Its non-GAAP profit of $0.04 per share was $0.02 below analysts’ consensus estimates.

Is now the time to buy BGS? Find out in our full research report (it’s free).

B&G Foods (BGS) Q2 CY2025 Highlights:

• Revenue: $424.4 million vs analyst estimates of $429.6 million (4.5% year-on-year decline, 1.2% miss)
• Adjusted EPS: $0.04 vs analyst estimates of $0.06 ($0.02 miss)
• Adjusted EBITDA: $57.98 million vs analyst estimates of $60.63 million (13.7% margin, 4.4% miss)
• Adjusted EPS guidance for the full year is $0.55 at the midpoint, missing analyst estimates by 3.1%
• EBITDA guidance for the full year is $278 million at the midpoint, below analyst estimates of $280.2 million
• Operating Margin: 5.2%, down from 9.9% in the same quarter last year
• Market Capitalization: $332.8 million

StockStory’s Take

B&G Foods’ second quarter was marked by weaker-than-expected sales and profit, with management attributing the underperformance to ongoing challenges in its frozen and vegetables business, increased trade spend, and the timing of key holidays. CEO Kenneth Charles Keller pointed to higher costs related to last year’s poor crop yields, particularly for corn and peas, as well as elevated promotional spending tied to Easter falling later in the quarter. The company also noted that lower pricing for Crisco oil, in line with its commodity-based pricing model, contributed to revenue declines. Management acknowledged that the impact of these factors resulted in a cautious tone, with CFO Bruce Wacha stating, “While we are not satisfied with today’s results, we are pleased with the continued progress relative to our challenging start to 2025.”

Looking ahead, B&G Foods’ updated guidance reflects both the impact of recent portfolio divestitures and ongoing macro headwinds, including tariffs and input cost volatility. Management expects cost reduction initiatives and anticipated improvements in the frozen segment to support a return to year-over-year EBITDA growth in the second half, even as base business net sales are projected to remain flat to slightly down. CEO Kenneth Charles Keller emphasized the company’s focus on streamlining operations, stating, “We are committed to reducing leverage and balance sheet risk,” and outlined plans to deploy divestiture proceeds toward debt reduction. However, management cautioned that the full recovery from tariff impacts, especially in the spices and flavor solutions business, may not occur until sometime in 2026.

Key Insights from Management’s Remarks

Management cited higher crop costs, increased promotional spending, and divestiture-related portfolio changes as primary drivers of Q2 performance, while emphasizing ongoing efforts to streamline operations and improve profitability.

• Frozen and vegetables headwinds: The frozen and vegetables unit faced elevated costs from last year’s crop shortfall, especially in corn and peas, and was further impacted by increased promotional spending and the end of a key retail discount program. Management expects many of these pressures to ease in the second half of the year.

• Crisco and specialty declines: Net sales in the specialty business were significantly affected by lower Crisco oil pricing, reflecting falling input costs for soybean oil. Although revenue declined, segment EBITDA improved due to better raw material costs for brands like Crisco and Clabber Girl.

• Portfolio divestitures: B&G Foods completed the sale of its Don Pepino, Sclafani, and Le Sueur U.S. brands during the quarter, aiming to create a more focused portfolio and reduce working capital requirements. Management indicated that proceeds from these sales will be used to reduce debt and streamline the business.

• Trade spend and promotional activity: The company saw an increase in trade spending, partly due to the timing of Easter and efforts to maintain competitiveness on shelf. Management expects the year-over-year growth in promotional spend to moderate in the second half as prior-year comparisons normalize.

• Tariff and commodity cost exposure: Elevated tariffs, particularly on imported garlic and black pepper, weighed on margins in the spices and flavor solutions business. Management is pursuing targeted pricing actions and alternative sourcing, but noted that full recovery from tariff impacts may extend into 2026.

Drivers of Future Performance

Management’s outlook centers on further portfolio simplification, margin recovery initiatives, and managing ongoing tariff-related headwinds.

• Frozen segment profitability recovery: The company expects its U.S. frozen vegetables segment to return to profitability in the second half, benefiting from improved crop costs, production efficiencies in its Mexican facility, and a partial offset from favorable foreign exchange. Management sees these improvements as key to stabilizing EBITDA.

• Tariff mitigation and pricing actions: B&G Foods is implementing targeted price increases to offset the cost impact from tariffs, particularly in its spices and flavor solutions segment. However, management acknowledged that there will be a lag before these actions are fully effective due to retailer lead times and contract structures, with some recovery extending into 2026.

• Divestiture proceeds and debt reduction: The company plans additional asset sales to further focus its portfolio and reduce leverage. Management stated that proceeds from recent and future divestitures will go directly toward debt repayment, aiming to bring net leverage down by at least a full turn within the next year.

Catalysts in Upcoming Quarters

In the coming quarters, StockStory analysts will be tracking (1) the pace and financial impact of further asset divestitures, (2) progress toward margin recovery in the frozen and spices segments as cost-saving and pricing actions take hold, and (3) the effectiveness of tariff mitigation strategies in maintaining profitability. The company’s ability to reduce leverage and stabilize core sales will also be critical signposts.

B&G Foods currently trades at $4.17, in line with $4.13 just before the earnings. Is there an opportunity in the stock?Find out in our full research report (it’s free).

Our Favorite Stocks Right Now

When Trump unveiled his aggressive tariff plan in April 2025, markets tanked as investors feared a full-blown trade war. But those who panicked and sold missed the subsequent rebound that’s already erased most losses.

Don’t let fear keep you from great opportunities and take a look at Top 6 Stocks for this week. This is a curated list of our High Quality stocks that have generated a market-beating return of 183% over the last five years (as of March 31st 2025).

Stocks that made our list in 2020 include now familiar names such as Nvidia (+1,545% between March 2020 and March 2025) as well as under-the-radar businesses like the once-micro-cap company Kadant (+351% five-year return).

StockStory is growing and hiring equity analyst and marketing roles. Are you a 0 to 1 builder passionate about the markets and AI? See the open roles here.