US manufacturer B&G Foods is considering divesting its frozen and canned vegetable businesses.
The news came alongside cuts to B&G Foods' revenue and profit forecasts for 2024.
The company said it has been evaluating potential divestitures that “represent between 10% to 15% of the company’s consolidated net sales”.
After selling off its Green Giant shelf-stable product line in the US to Seneca Foods last November and its snacks business Back to Nature the year before to Barilla, B&G Foods has decided to place its frozen and remaining canned vegetable businesses under review.
The New York-listed company is “evaluating a possible divestiture of some or all of the assets in its frozen and vegetable business unit, either in a single transaction or in a series of transactions”, it wrote in a statement.
The company’s frozen and vegetable unit’s results included just Green Giant and Le Sueur brands.
CEO and president Casey Keller said: “Green Giant remains a strong brand with broad awareness and distribution, and the frozen vegetables category is on trend with health and dietary trends.
“However, I believe the frozen vegetable business may not be the right fit with B&G Foods’ focus and capabilities, particularly since we have no plans to add more assets in the frozen portfolio given the opportunities in our core shelf-stable businesses and overall capital constraints.”
The company revised its net sales guidance for i2024 to a range of $1.955bn to $1.985bn, having previously estimated $1.975bn to $2.02bn.
Adjusted EBITDA guidance was also cut to a range between $300m to $320m from the previous guidance of $305m to $325m. Adjusted diluted earnings per share guidance was revised to a range of $0.75 to $0.95 from $0.80 to $1.
The group saw its net sales fall 7.1% in the opening quarter of 2024, reaching $475m.
It returned a net loss of $40.2m compared to net income of $3.4m in the opening three months of 2023. Adjusted EBITDA stood at $75m, down 8.9% year-on-year.
Keller said: “B&G Foods’ first-quarter results demonstrated consistent margins and moderating inflation, with declines in net sales driven by foodservice trends and increased promotion spending. Volumes to retail customers were relatively flat.
“Going forward, we remain committed to driving low single-digit growth and continuing to reduce leverage. Further, we are accelerating efforts to reshape and clarify the portfolio for sharper focus and fit.”
