B&G Foods (BGS) Q3 2026 Earnings Call Transcript

DATE

Tue, Nov. 10, 2026

CALL PARTICIPANTS

• Director, Corporate Strategy and Business Development - AJ Schwabe
• Chief Executive Officer - Rob Mills
• Chief Financial Officer - Bruce Wacha

TAKEAWAYS

• Net Sales -- $459.8 million, representing a 4.7% increase compared to the third quarter of 2025.
• Base Business Net Sales -- $404.6 million, an increase of 5% driven primarily by higher volumes across the portfolio.
• Adjusted EBITDA -- $81.8 million, or 17.8% of net sales, reflecting an increase from $70.4 million in the prior year quarter.
• Non-GAAP Adjusted Diluted EPS -- $0.21, an increase from $0.15 in the third quarter of 2025.
• Full-Year Net Sales Guidance -- $1.76 billion to $1.8 billion, representing a raised range for the fiscal year.
• Full-Year Adjusted EBITDA Guidance -- $280 million to $290 million, also raised from previous expectations.
• Volume Growth -- 6.1% of base business net sales, contributing $23.6 million in growth driven by core branded retail and institutional sales.
• Net Pricing and Mix -- A decrease of 0.9%, or $3.3 million, partially offsetting volume gains in the base business.
• Meals Segment Net Sales -- $140.6 million, an increase of 27.9% primarily due to the contribution of $29 million from the College Inn and Kitchen Basics acquisition.
• Specialty Segment Net Sales -- $163 million, an 8.3% increase driven by higher institutional bulk vegetable oil sales and increased volumes of Grandma's Molasses.
• Spices and Flavor Solutions Segment Net Sales -- $101.7 million, a 0.3% increase reflecting growth in private label and food service channels.
• Frozen and Vegetables Segment Net Sales -- $54.5 million, a 29.6% decrease resulting from the divestiture of the Green Giant U.S. frozen business.
• Consolidated Leverage Ratio -- 6.4x in the third quarter, which management identified as a seasonal peak for working capital.
• Productivity Target -- 3% of cost of goods sold, intended to offset inflationary pressures and improve asset utilization.
• Net Interest Expense -- $44.8 million, an increase of $7.5 million due to higher debt outstanding and an 11% interest rate on new senior notes.
• Capital Expenditures -- $25 million or less, representing the company's reaffirmed target for the full fiscal year.
• Asset Impairment Charge -- $40.7 million, a non-cash charge recorded in connection with the divestiture of the B&M and Joan of Arc brands.
• Green Giant Canada Performance -- Sales increased 21.6% to $28.1 million, reflecting strong market share in the Canadian frozen and shelf-stable vegetable categories.
• Contract Manufacturing Revenue -- $26.3 million, generated through the cost-plus arrangement for the divested Green Giant U.S. frozen business.

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RISKS

• Wacha stated, "EBITDA would have been higher absent some pain on the diesel fuel and higher cost lapping on Crisco," noting these as the primary cost drivers during the quarter.
• Wacha noted that segment adjusted EBITDA for the Specialty unit decreased $3.8 million, primarily driven by "increased soybean and canola oil costs for Crisco."
• Management identified that the consolidated leverage ratio rose to 6.4x in the third quarter, which remains above the long-term target of less than 5.5x.

SUMMARY

B&G Foods, Inc. (NYSE:BGS) reported a 4.7% increase in net sales for the third quarter, driven by volume growth and contributions from the College Inn and Kitchen Basics acquisition. Management stated that the company is implementing a new operating approach focused on profitable growth, productivity, and disciplined execution to improve cash generation. The company reported segment performance gains in the Meals and Specialty units while pursuing a deleveraging strategy to reduce the consolidated leverage ratio below 6x by the middle of 2027. Management indicated that operational improvements in manufacturing facilities and the integration of higher-margin brands have contributed to adjusted EBITDA margin expansion.

• Management reported that Green Giant Canada remains a market leader in both frozen and shelf-stable vegetables, with sales increasing 21.6% during the quarter.
• The company plans to launch a new Cream of Wheat fiber innovation early next year as part of a strategy to focus resources on higher impact brands.
• Mills reported that the Hurlock, Maryland manufacturing facility transitioned from an underperforming plant to a stronger operation following improvements in leadership and performance.
• The company added production lines at its Ankeny spices facility to scale more efficiently with food service and private branded customers.
• Management stated that the most durable path to deleveraging involves improving the earnings power and cash generation of existing assets rather than relying solely on transactions.
• The company is utilizing new tools, including AI, to improve marketing targeting, speed, and measurement for better returns on investment.

INDUSTRY GLOSSARY

• Adjusted EBITDA: A non-GAAP financial measure that excludes certain items like interest, taxes, and non-recurring expenses to measure core operating performance.
• Base Business Net Sales: Net sales excluding the impact of recent acquisitions, divestitures, and certain contract manufacturing agreements.
• COGS: Cost of Goods Sold, representing the direct costs of producing the goods sold by a company.
• Consolidated Leverage Ratio: A financial metric used in the company's credit agreement to measure total debt relative to adjusted EBITDA.
• M&A: Mergers and Acquisitions, the process of combining companies or assets through various financial transactions.
• Section 163(j): A provision of the Internal Revenue Code that limits the deduction of business interest expense.

Full Conference Call Transcript

Operator: Good day, and welcome to the B&G Foods third quarter 2026 earnings call. Today's call, which is being recorded, is scheduled to last about an hour, including remarks by B&G Foods management and the question-and-answer session. I would now like to turn the call over to AJ Schwabe, Director, Corporate Strategy and Business Development for B&G Foods. AJ?

AJ Schwabe: Good afternoon, and thank you for joining us. With me today are Rob Mills, our Chief Executive Officer, and Bruce Wacha, our Chief Financial Officer. You can access detailed financial information on the quarter in the earnings release we issued today, which is available at the Investor Relations section of bgfoods.com. Before we begin our formal remarks, I need to remind everyone that part of the discussion today includes forward-looking statements. These statements are not guarantees of future performance, and therefore, undue reliance should not be placed upon them.

We refer you to B&G Foods' most recent annual report on Form 10-K and subsequent SEC filings for more detailed discussion of the risks that could impact our company's future operating results and financial condition. B&G Foods undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. We will also be making references on today's call to the following non-GAAP financial measures: adjusted EBITDA, segment adjusted EBITDA, adjusted net income, adjusted diluted earnings per share, adjusted gross profit, adjusted gross profit percentage, base business net sales, and segment adjusted expenses.

Reconciliations of these financial measures to the most directly comparable GAAP financial measures are provided in today's earnings release. Rob will begin the call with opening remarks and discuss various factors that affected our results, selected business highlights, and his thoughts concerning the outlook for the remainder of fiscal 2026. Bruce will then discuss our financial results for the third quarter 2026 and our increased guidance for fiscal 2026. I would now like to turn the call over to Rob.

Robert Mills: Thank you, AJ, and good afternoon, everyone. I am pleased to join you for B&G's third quarter 2026 earnings call. We delivered a very strong quarter. We generated base business net sales growth of five percent in the third quarter and 1.8% year-to-date. The growth in the base business net sales was primarily driven by volume. Adjusted EBITDA increased $12.4 million, or 6.6% year-to-date. That momentum has carried into the fourth quarter, and we are raising our full-year guidance for net sales and adjusted EBITDA. We remain focused on building upon this progress, and Bruce will cover the financial details and guidance shortly. Before I go further, I wanted to thank our teams across B&G Foods.

I have spent significant time with our commercial and brand teams, operations leaders, and customer partners, and in our manufacturing facilities. I have seen firsthand the commitment of our employees throughout the company, and I appreciate the way the organization has welcomed me. As many of you know, I have served on B&G Foods Board since 2018. That experience gave me a solid understanding of our portfolio, business model, and financial position. Working directly with our teams has reinforced my belief that we have a strong foundation, brands consumers know and love, enduring customer relationships, talented employees, and valuable manufacturing capabilities. We also have opportunities to be more focused, faster, and more consistent in how we operate.

The team and I are driving what I think of as the B&G Foods operating way: clear priorities, decisions made closer to the business, stronger collaboration across functions, and accountability for results. Our agenda has four connected priorities. First, drive profitable net sales. Second, improve EBITDA through operational excellence and productivity. Third, improve cash generation, reduce leverage, and actively manage our portfolio. Fourth, invest in the talent, capabilities, and culture that support consistent performance. Our first priority is profitable net sales. We need to win in our core branded retail business, where distribution, sales velocity, and market share matters.

We also see meaningful opportunities across private brands, food service, club, and digital channels, where we can leverage our manufacturing capabilities and customer relationships. As I mentioned earlier, third quarter base business net sales grew approximately five percent, bringing year-to-date net sales growth to approximately 1.8%. Importantly, we are seeing continued net sales momentum as we enter the fourth quarter. Early in my tenure as CEO, we worked brand by brand to identify what is working, where we can improve, and which actions will have the greatest impact. We are focused on execution, improving distribution and shelf presence, building velocity, sharpening promotional effectiveness, and delivering innovation that matters to our customers and to the consumer.

For example, we have reallocated resources towards higher impact brands and opportunities, including Cream of Wheat and Cream of Rice. We expect to build momentum for the brand as we look to launch a new Cream of Wheat fiber innovation offering early next year. We have strong platforms across our portfolio. Spices and seasoning is an important part of B&G Foods, with well-known brands, private label opportunities, strong relationships in club and food service, the ability of scale, and manufacturing capabilities we can build on. We also have opportunities across other categories. Our College Inn and Kitchen Basics brands give us a strong presence in the growing broth and stock category.

In baking, Crisco is a leading brand in vegetable oil and shortening, Clabber Girl in baking powder, and Grandma's in molasses. In hot breakfast, Cream of Wheat is a strong heritage brand, and our Cream of Wheat protein and fiber offering and Cream of Rice provide additional growth opportunities. In Mexican food, Ortega is a leader in taco sauce, and Las Palmas has a strong position in enchilada sauce. These brands reflect the strength and heritage of our portfolio. Our priority is to translate those advantages into better distribution, stronger sales, and improved profitability. Our retail customers are central to this work.

We are spending more time directly with our customers, listening to what matters to them, and finding ways to grow together. We are making and will continue to make thoughtful pricing and promotional decisions that improve customer value and competitiveness while maintaining discipline around returns. We also see opportunities beyond traditional branded retail. We are selectively pursuing profitable incremental volume in food service, club, private label, and other channels where it strengthens customer relationships, leverages our manufacturing capabilities, and improves asset utilization, thus profitability. Our second priority is improving EBITDA through operational excellence and productivity, and we are already making great progress.

The team has done meaningful work to reshape our cost structure following the Green Giant U.S. divestitures, and I appreciate that progress, and I believe we can build upon it. The third quarter showed the benefit of stronger volume, mix, and improved execution. For example, we have added production lines in our Ankeny spices and seasoning facility, allowing us to scale more efficiently with food services and private branded customers. At our Brooklands facility, we leveraged our capabilities to launch a new private label salsa for our customer. And in Yadkinville, we are expanding capabilities and improving the efficiency of our baking oven operations.

We have also focused our investments within our existing capital plans to improve throughput across our manufacturing facilities, and we plan to continue to do so. I recently visited our Hurlock, Maryland manufacturing facility, and while I was there, I saw firsthand the progress that the team has made in improving performance and how effective leadership over the past year has helped turn an underperforming plant into a stronger performing operation. We have an annual incremental productivity target of approximately three percent of cost of goods sold designed to offset inflation and drive profitability. We plan to achieve this goal by focusing on procurement and sourcing, manufacturing productivity, logistics, and just simplifying how we work.

In addition to these actions, we will continue to improve forecasting and strengthening coordination among sales, marketing, and supply chain to enhance customer service. Portfolio optimization and improved planning are helping us manage inventory more efficiently and improve working capital discipline. Better manufacturing performance has also helped us to win additional private label and food service business. These are practical improvements, better service, less waste, more productive assets, and lower costs. This is what I mean by the B&G Foods operating way. Teams working together to solve problems and deliver results. We will keep raising standards for plant performance, safety, quality, and service while directing capital towards investments with clear returns. Our third priority is strengthening the balance sheet.

We are focused on reducing our consolidated leverage ratio as defined in our credit agreement to below 6x by middle of 2027, and we remain committed to achieving our longer-term target of less than five and a half times over time. We intend to achieve this through profitable sales growth, EBITDA improvement, stronger cash conversion, and a disciplined approach to portfolio management. B&G Foods has a long history of actively managing its portfolio. Following the divestiture of Green Giant U.S. Frozen business, we recently completed the divestiture of the B&M and Joan of Arc brands. These actions demonstrated our disciplined approach to portfolio management while also generating proceeds to help reduce net debt.

We have also expanded our presence in the soup aisle and into the growing on-trend broth and stock category through the College Inn and Kitchen Basics acquisition. Bruce will provide additional detail on the portfolio and the financial implications of these transactions. We will continue to evaluate both acquisitions and divestiture opportunities that create value and improve our financial flexibility. But transactions alone will not deliver our objectives. The most durable path to deleveraging is improving the earnings power and cash generation of the business we own and operate today. Our fourth priority is building the organization and capabilities that deliver better results year after year.

That means raising the bar on teamwork, speed, follow-through, and accountability while investing in our employees and adding capabilities where they can make a difference. Commercially, it also means making our marketing dollars work harder through better consumer insights, more responsive digital and social content, faster identification of emerging trends, and new tools, including AI, that can improve targeting, speed, and measurement. This isn't about just launching a bigger campaign for their own sake. It's about being more disciplined, investing more intelligently, learning faster, and getting better return on every dollar. The B&G Foods operating way is about ownership and teamwork.

When brand, sales, finance, and operations teams work from common priorities and act with urgency, we serve customers better and create a stronger business. We will build a culture where talented employees can grow, make decisions, and see the positive impact of their work. Flawless execution is our focus. We have already seen wins in sales, service, and asset utilization. Now we need to repeat that performance consistently week after week. I am proud of the third quarter and even more confident in what our team can accomplish moving forward. B&G Foods has strong brands, deep capabilities, and committed teams. Our responsibility is to turn those strengths into consistent growth, stronger earnings, better cash flow, and lower leverage.

That is the work that's in front of us, and we are focused on delivering. With that, I'll turn the call over to Bruce to review our financial results, our portfolio developments, and updated 2026 guidance. Bruce.

Bruce Wacha: Thank you, Rob. Good afternoon, everyone. Thank you for joining us today. This afternoon, I plan to cover our financial performance, our continued portfolio reshaping, and our updated guidance for fiscal 2026. As we highlighted on our last call, we had a fast start to the third quarter. Our financial performance was very strong in July, and that momentum continued throughout our third quarter and into our fourth quarter. For the third quarter of 2026, we generated $459.8 million in net sales, $81.8 million in adjusted EBITDA, adjusted EBITDA as a percentage of net sales of 17.8%, and $0.21 in adjusted diluted earnings per share.

Net sales for the third quarter increased by $20.5 million, or 4.7%, and base business net sales increased by $19.4 million, or five percent. The increase in base business net sales was driven by increases in all four of our reporting segments. The increase in base business net sales consisted of an increase of $23.6 million, or 6.1%, from higher volumes across the portfolio, partially offset by $3.3 million, or 0.9%, decrease in net pricing and the impact of product mix, and a $0.9 million, or 0.1%, negative impact from the foreign exchange. Net sales from the College Inn and Kitchen Basics acquisition and the U.S. Frozen contract manufacturing business contributed $29 million and $26.3 million respectively during the quarter.

These contributions more than offset the $54.1 million in net sales generated in the prior year quarter from the since divested Green Giant U.S. Frozen and Le Sueur U.S. businesses. For the first three quarters of 2026, our base business net sales are up $19.7 million, or 1.8%, compared to the first three quarters of last year. The increase was led by volume growth of $15.2 million, or 1.4% of base business net sales. Our core branded retail business is improving, and we are continuing to execute and grow our existing businesses while taking on new opportunities to leverage our manufacturing capabilities in alternative channels.

Our M&A additions, including College Inn, Kitchen Basics, and the Green Giant contract manufacturing business, are all performing in line with or better than our M&A models. At the same time, we are managing our fixed cost structure following the divestitures and limiting stranded costs, which is visible through our reduction in unallocated corporate costs, both in the quarter and year to date. The divestiture of the B&M and Joan of Arc brands closed after the end of the quarter, and therefore did not affect our third quarter operating results, other than a non-cash impairment charge recorded in connection with the divestiture that I will discuss shortly.

For the third quarter of 2026, gross profit was $108.9 million, or 23.7% of net sales, and adjusted gross profit was $111.2 million, or 24.2% of net sales. For the third quarter of 2025, gross profit was $99 million, or 22.5% of net sales, and adjusted gross profit was $98.8 million, or 22.5% of net sales. The increases in gross profit as a percentage of net sales and adjusted gross profit as a percentage of net sales primarily reflects the acquisition of the higher-margin College Inn and Kitchen Basics brands and the divestiture of the lower-margin Green Giant U.S. frozen business.

Selling, general, and administrative expenses increased by $6.7 million, or 14.9%, to $51.3 million for the third quarter of 2026 from $44.6 million from the third quarter of 2025. The increase was primarily composed of increases in acquisition divestiture-related and non-recurring expenses of $7.9 million. Additional drivers include increased consumer marketing expenses of $0.6 million and warehouses expenses of $0.3 million, partially offset by decreases in selling expenses of $1.1 million and general and administrative expenses of $1 million. Expressed as a percentage of net sales, selling, general, and administrative expenses increased by one percentage point to 11.2% for the third quarter of 2026, as compared to 10.2% for the third quarter of 2025.

Excluding the acquisition divestiture-related and non-recurring expenses, SG&A as a percentage of net sales was 8.9% compared to 9.6% in the year-ago quarter. We generated $81.8 million in adjusted EBITDA, or 17.8% of net sales, in the third quarter of 2026, compared to $70.4 million, or 16%, in the third quarter of 2025. The increase in adjusted EBITDA was driven by an increase in net sales, improved operating performance, lower tariff expense, and the continued execution of our M&A strategy, including the addition of the higher-margin College Inn and Kitchen Basics brands and the divestiture of our lower-margin Green Giant U.S. Frozen business.

Net interest increased by $7.5 million to $44.8 million for the third quarter of 2026 from $37.3 million in the third quarter of 2025. The increase was primarily attributable to higher average long-term debt outstanding, largely reflecting debt incurred to fund the College Inn and Kitchen Basics acquisition, as well as the 11% interest rate on our new senior notes due 2031. The increase also reflects a $1.1 million loss on extinguishment of debt during the quarter, compared with a net gain of $0.5 million in the prior year quarter. Depreciation and amortization expense was $14.4 million in the third quarter of 2026, compared to $16.6 million in the third quarter of 2025.

We had a net loss of $32.5 million, or $0.40 per diluted share, in the third quarter of 2026, compared to a net loss of $19.1 million, or $0.24 per diluted share, in the third quarter of 2025. The net loss for the third quarter of 2026 was driven by a $40.7 million pre-tax non-cash impairment charge related to the B&M and Joan of Arc trademarks in connection with the divestiture of those brands, as well as other acquisition divestiture-related and non-recurring costs. We had adjusted net income of $17.8 million, or $0.21 per adjusted diluted share, in the third quarter of 2026.

In the third quarter of 2025, we had adjusted net income of $11.7 million, or $0.15 per adjusted diluted share. Details regarding the impairments and other adjustments are reflected in our adjusted EBITDA and adjusted net income are described further in today's earnings release and 10-Q. I would now like to touch on the results by business unit for the third quarter. Net sales for spices and flavor solutions increased by $0.3 million, or 0.3%, in the third quarter of 2026 to $101.7 million from $101.4 million in the third quarter of 2025.

The increase was primarily due to strong continued growth in private label and food service channels, and a moderate increase in net pricing, partially offset by modest declines in volumes for certain spice brands. Spices and flavor solutions segment EBITDA increased by $6.4 million in the third quarter of 2026 compared to the third quarter of 2025. The increase in segment adjusted EBITDA was largely driven by increased net pricing and product mix, as well as improved profit margins, favorable lapping of 2025 tariffs, and reduced operating costs. The increase was offset in part by increased transportation and logistics costs due to rising diesel fuel prices.

Net sales for meals increased by $30.6 million, or 27.9%, in the third quarter of 2026 to $140.6 million from $110 million for the third quarter of 2025. The acquisition of the College Inn and Kitchen Basics brands added approximately $29 million of net sales during the third quarter. Excluding the impact of M&A, meals net sales increased by $1.6 million, or 1.5%. Meals also benefited from improved sales performance across the portfolio, and as Rob mentioned earlier, the launch of a new private label salsa for one of our customers. Meal segment adjusted EBITDA increased by approximately $5.9 million, primarily driven by the favorable impact of the acquisition of College Inn and Kitchen Basics brands.

The increase was offset in part by increased transportation and logistics costs due to rising diesel fuel prices. Net sales for specialty increased by $12.5 million, or 8.3%, in the third quarter of 2026 to $163 million from $150.5 million in the third quarter of 2025. The increase was primarily due to increased institutional bulk vegetable oil sales, which are an area of focus as we work to better leverage our manufacturing and refining capabilities. We also benefited from increased volumes of Grandma's Molasses, which is the number 1 brand in the growing U.S. molasses category, as well as improved net sales performance in the aggregate across the remainder of the specialty portfolio.

Specialty segment adjusted EBITDA decreased by $3.8 million in the third quarter of 2026 compared to the third quarter of 2025. The decrease was primarily driven by increased soybean and canola oil costs for Crisco, as well as increased transportation and logistics costs due to the rising diesel fuel prices. Year-over-year comparisons in the frozen and vegetable segment are significantly affected by the Le Sueur US and the Green Giant U.S. Frozen divestitures, and the impact of our new contract manufacturing business for Green Giant U.S. Frozen. We are pleased with the continued strength of Green Giant Canada, where third quarter net sales increased by $5 million, or 21.6%, compared to the third quarter of 2025.

Separately, the new contract manufacturing business for Green Giant U.S. Frozen generated $26.3 million in net sales for the quarter. The contract manufacturing arrangement has a cost-plus structure and provides a modest but stable profit contribution. As Rob mentioned earlier, and as disclosed in our press release, we are increasing our guidance for net sales and adjusted EBITDA and reaffirming our guidance for adjusted earnings per share. Our increased guidance reflects the progress that we have made in fiscal 2026 through our continued refinement of our brand and product portfolio and improvements in our operating performance. Our increased guidance reflects that progress.

Please also note that our guidance reflects the expected impact only of acquisitions and divestitures that have already closed. For example, this includes the Don Pepino, Le Sueur US, Green Giant U.S. Frozen, B&M, and Joan of Arc divestitures, the Green Giant U.S. Frozen contract manufacturing business, and the College Inn and Kitchen Basics acquisition. Our guidance does not include the potential impact of any divestitures of Green Giant Canada. Also, as a reminder, our guidance reflects that fiscal 2026 has one fewer week than fiscal 2025, which had a 53rd week. While we love the benefit of the 53rd week last year, fiscal 2026 will lap the extra 53rd week in 2025.

As a result, as noted in our earnings release, we expect fiscal 2026 net sales in the range of $1.76 billion-$1.8 billion, adjusted EBITDA in the range of $280 million-$290 million. Adjusted EBITDA as a percentage of net sales in the range of approximately 15.9%-16.1%. We are reaffirming our adjusted diluted earnings per share to be in a range of $0.575-$0.675. Additionally, we expect for fiscal 2026 full year, interest expense of $160 million-$165 million, including cash interest expense of $152.5 million-$157.5 million. Depreciation expense of $40 million-$45 million. Amortization expense of $17 million-$19 million. Cash taxes of approximately $5 million or less. An effective tax rate of 26%-27%. CapEx of approximately $25 million or less.

Now, I will turn the call back over to Rob for further remarks.

Robert Mills: Thank you, Bruce. Our focus for the remainder of 2026 is pretty straightforward. Deliver on our fourth quarter guidance, continue improving net sales performance and customer execution, advance productivity, generate cash, and put a strong operating plan in place for 2027 and beyond. We have the brand, capabilities, and the team to build a stronger B&G Foods. Our focus is clear, and we will execute. Thank you for your interest in B&G Foods. Now, operator, we are ready for questions.

Operator: Thank you. We will now be conducting a question-and-answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation tone will indicate your line is in the question queue. Please limit yourself to one question and one follow-up. You may press star two if you would like to remove your question from the queue. For participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Our first question will come from Scott Marks with Jefferies.

Scott Marks: Hey, good afternoon all. Thanks very much for taking the questions. First thing I wanted to ask about just the base business performance. Sounded like volume growth was pretty strong in the quarter, and it also sounded like a lot of that may have been driven by some of the institutional bulk vegetable oil sales and some of the spices, private label, and food service business. Just wondering if you can speak to that a little bit and help us understand how you're thinking about shifting more of that mix to branded as we look out over the next year and pull back at all, if you will, on some of the maybe lower margin private label business. Thanks.

Bruce Wacha: Sure. Thanks, Scott. Happy to. I think the key things here to remember, part one, year to date, our net sales are up 1.8%. Most of that's volume, it's about 1.4%. From a mix standpoint, we continue to be a branded packaged food manufacturer. That's our core focus, is core retail. But we do right now have the opportunity, particularly where we have manufacturing capabilities that we can leverage, to extend that performance outside of the core retail channel into other channels. That includes private brands, it includes food service, club, and also industrial sales. So there is a combination of those things going on. We've been talking about it for a little while.

It is helping to drive performance, and we think that we need to have continued strong performance across all of those, as well as this is a unique year for us, but not really, because we do it fairly regularly, of buying things. As an M&A vehicle, we're going to continue to look for opportunities like College Inn, Kitchen Basics, et cetera, where we can drive incremental growth on top of the base business. That's kind of what we had for the quarter.

Scott Marks: Okay. Appreciate the thoughts there. Then just second one from me, you talked about the M&A engine and kind of getting back to that. Given that the Green Giant Canada deal was canceled, wondering how you're thinking about that asset. Do you still see it as potential to be hived off, or do you plan on running that for a little bit longer? I ask in the context of, I think that was a component of your business being able to kind of bring down the leverage a little bit. Just wondering how you're thinking about it from that perspective. Thanks.

Bruce Wacha: Sure. It is a little bit of both there. Green Giant in Canada is the number one brand for both frozen vegetables and shelf-stable vegetables. The business has tremendous momentum. It is up real strong double digits this year. I am happy with that part of the performance. To the extent that we own and operate this brand into perpetuity, we need to work a little bit harder to fix the profitability, and that is our base case. We also think this brand and the dynamics around it is sellable. There is still the opportunity to transact with other parties, and that is quite possible, something that happens in the coming months as well.

Probably more to update as life goes on, because it is hard to say right now with regards to ongoing M&A, but feeling really good about the trajectory of that business.

Scott Marks: Okay. Appreciate it. Thanks. I will pass it on.

Operator: Our next question will come from Robert Moskow with TD Cowen.

Robert Moskow: Hi. Thanks. Kind of a follow-on to Scott's question. I understand the opportunity to extend your plants into industrial sales and private label. My question is the sustainability of it. In the past, some of those kind of opportunities have been episodic, and then they do not last. Can we expect, especially what you did in vegetable oil, to sustain into next year? I guess that is the first question. Second question is, was it just opportunistic? Was it an opportunity that just kind of popped up and you took it, or has this been part of the strategy for a while?

Bruce Wacha: If you think about the opportunities that we have, where we are focused is less on the opportunistic, episodic. Those things, if they happen, we will take them. But where the real focus has been is where we have manufacturing capabilities that we want to leverage, and we have customer relationships. It is a little bit less of the focus on here today, gone tomorrow, and more around building sustainable businesses. For example, in spices, our private brands relationship is very strong, and we think that is something that is continued to grow.

The Crisco opportunity there, we have a world-class refinery for vegetable oil, and we want to try to take advantage of that and leverage that as much as possible. That is probably a more recent focus than, say, the spice opportunity.

Robert Moskow: Okay. In terms of your price-cost relationship with vegetable oil, those costs have been rising a lot. Where are you right now? Has that been pretty stable? Have the profits been pretty stable? It is kind of hard to see now with this big, chunky industrial sale. Have the margins been pretty consistent?

Bruce Wacha: This was a year, and we talked about this on our first quarter and second quarter call, this was a year where we were planning on leaning in a little bit from a price standpoint on Crisco to protect some volumes. We were a little bit lucky and a little bit well-planning. We were fairly well-covered for a good portion of this year on our purchases of soybean oil. So, when costs came up, we escaped a little bit of that volatility. With that said, margins on this business are lower than they were last year, and you should see that in our segment financials. But they are lower, but they are still pretty good margins and still reasonable.

Going forward, that is the plan. We feel pretty good because right now, costs for diesel and for soybean oil, which are the two biggest pain points for us this year, have actually come down over the last couple weeks.

Robert Moskow: The input costs have?

Bruce Wacha: Yes.

Robert Moskow: Right. Okay. All right. Thank you.

Bruce Wacha: Thank you. Yep.

Operator: We'll go next to Karru Martinson with Jefferies.

Karru Martinson: Good afternoon. Sorry to keep harping on the same volume question, but to frame it another way is, how do we square the strong outperformance against the Nielsen data, and how should we kind of look at you guys when we go forward here?

Bruce Wacha: There's probably 60%-70% of our business that's core branded retail business that tracks fairly closely to the consumption data over time. Then there's another 30%-40% that represents this other channels or alternative channels, and that is private brands, it's food service, it's club, and now with Crisco, industrial oil is a focus. We got to hit all of them. There's a desire to improve the consumption data because that's driving our brands, and that's very important. But we do have these other areas and channels that today are driving incremental sales, and that's a real part of the business.

Karru Martinson: Okay. Just in terms of the tariff refund, what was that in the quarter, and is there any kind of additional proceeds that we should expect for the fourth quarter?

Bruce Wacha: It was a lot smaller in the third quarter than it was in the second quarter. As a reminder, our total tariff exposure in 2025 from an incremental tariffs was less than $10 million. A fair amount of the refunds that we got were in the second quarter, a couple million dollars in the third quarter, and probably de minimis in the fourth quarter.

Karru Martinson: Okay. Thank you very much, guys. Appreciate it.

Operator: As a reminder, if you would like to ask a question, please press star one. We will go next to Carla Casella with JPMorgan.

Carla Casella: Hi. Thanks for taking the question. Just on Canada, if that is a business that you end up holding onto, what is a normalized margin for that? Then similar question for the co-man. Trying to get a sense for what that kind of frozen business could do from an EBITDA margin standpoint with those two business being the majority of it.

Bruce Wacha: Yeah. We have not disclosed that Canada margin, and I think that is an area where there is an opportunity for us to really improve it. It is fairly low margin today, but it is something that we think that there is an opportunity to optimize. That would be the base case if we continue to own it, is we have got to fix and improve those margins. On the manufacturing business, it is probably a mid to high single digits margin on an EBITDA basis. Not a game changer, but fairly stable annuity that we have off of those sales.

Carla Casella: Okay. Great. On the input cost side, can you give us any further breakout in terms of how much maybe you're seeing in inflation and transportation costs versus how much you're seeing increase in the raw material costs?

Bruce Wacha: The biggest pieces for us in our P&L today and what we see in the future, where we saw inflationary pressure, continues to be diesel fuel, logistics, transportation, and soybean oil. Those are the big drivers. What's different today than, call it, 2021 and 2022 is then inflation took off across the board, and we saw it broad-based. We haven't seen that so far today. We're somewhat encouraged that these costs are coming down relative to the peak, but they're still pretty high. We definitely saw it. EBITDA would have been higher absent some pain on the diesel fuel and higher cost lapping on Crisco.

Carla Casella: Okay. Great. Just from a cash flow perspective, you talk about the goal to delever, and most of that's coming through EBITDA growth. Does any of that contemplate debt paydown, and do you have any restrictions in terms of buying back some of your debt that's trading at a discount?

Bruce Wacha: We've got a pretty good history of buying back our debt when it's been at a discount. I think if you look at the last couple Ks, we certainly did that at least two or three years in the last three or four years. We're always looking for opportunities to come in and support our bonds and buy them back when they're cheap, which they are.

Carla Casella: Yeah. Okay. Great. Thanks.

Operator: We will hear next from Andrew Lazar with Barclays.

Andrew Lazar: Great. Thanks so much. Good afternoon. Rob, I guess my question is, I know the last couple years, I feel like B&G, the sort of the top line rate of growth or what the company was looking for was sort of in that very low single digit. Maybe it is flat, maybe it is up one percent, to try to do that sort of consistently and really focus more on cash generation and sort of managing the portfolio. Some of the commentary from tonight, is that still sort of what you are thinking about, or are you trying to approach this to be sort of maybe a faster growth entity?

If that is the case, I guess what makes you comfortable that is sort of the right goal for a company like this, particularly given the categories you are operating in, and obviously just given an even increasingly difficult sort of consumer backdrop? Thank you.

Robert Mills: Yeah. Thank you, Andrew, and thank you for the question. Big picture, our strategy has always been organic growth, zero or flat, two percent up with some type of M&A activity. As I referenced in my call, B&G has a lot of knowledge and a lot of success in driving strong M&A activity through acquisitions that just overall contribute to EBITDA and just the overall growth of the company.

With that being the backdrop, as Bruce mentioned, and I also referenced on the call, when you look at the tracked as well as non-tracked channels, we are very committed and still have work to do on the tracked channels for our core brands to drive up consumption and overall drive those brands back into that 0%-2%. Just as a reference point, when you look at our entire portfolio, majority of our brands are having positive growth. With that also being said, there are non-tracked channels out there that Bruce and myself both referenced that we're leaning into because they're true business models for the organization.

They leverage our manufacturing capabilities, they drive better asset utilization, and they fit nicely into the B&G portfolio, the categories that we own, et cetera. So, when you kind of sum it up, big picture, I wouldn't say our strategy is changing radically. It's not. Zero to two percent up from an organic perspective. We're going to continue to double down in our core retail brands and grow them. We're also going to take and ride the, what I would say, the growth that we've seen in the non-track brands or non-tracked channels to overall fuel just B&G's growth.

In my short tenure as CEO, but of course, I've had many years sitting on the board, what it really boils down to is this team having just clear priorities, executing well, and driving a sense of accountability. I'm really proud of the team and what I've seen and how this organization operates, but we could do more in the sense of driving with a sense of urgency and really focusing on our execution, and that's going to position us very well going into 2027. In my last 90 days, I've already seen meaningful changes in how we're operating as a team, and we'll continue to drive that in Q4 and positioning us for 2027.

So, big picture, very confident in the brands. I feel like our targets are reasonable. Now let's take advantage of just not supporting the growth of the core retail brands, but how we attack the other channels that are in front of us as well.

Andrew Lazar: Thanks for that. Then quick follow-up. Most, if not all, the larger cap food companies that have reported earnings recently have all intimated that sort of sell-side estimates for 2027 are simply still too high, primarily just because of rising input cost pressure, the potential need to take pricing. Again, pricing tends to lag costs on the way up, things of that nature, and just a difficult consumer backdrop in general still. I guess, I know you're not at a point yet either where you're going to provide 2027 guidance, but are there some of these headwinds that you see as well that we ought to be sort of taking into account now as we think out to next year?

Or maybe there are a couple of broader puts and takes you can kind of go through a little bit that we should just keep in mind for next year as we think about modeling. Thank you.

Bruce Wacha: Yeah, sure. Andrew, we typically give our guidance for the forward year after our fourth quarter results. I think the best that we can answer your question within that context is, yeah, obviously there's some inflation, and we're seeing it. Like we said, the largest areas where we're seeing inflation in the portfolio is diesel fuel, transportation, logistics costs, and soybean oil. Those have all come down from peak. If you were talking to me three weeks ago versus today, feel a little bit better today when we think about the outlook for 2027 versus where we would have thought three weeks ago. So, feel good that stuff's coming down. I think there'll be some pressures.

Rob Mills mentioned in his portion of our prepared remarks our strong desire to lean in from a productivity standpoint. I think that there's also going to be some offsets into that inflation from our efforts to drive savings in our factories, automations, improved efficiencies, et cetera. We then, just as a reminder, as you're thinking about that first quarter of 2027, will be incremental benefit from College Inn, Kitchen Basics, and the Green Giant co-pack transactions. So those will be a little bit of offset there. I'm sure there'll be good guys and bad guys that we'll be talking about as we get closer to those guidance numbers.

Andrew Lazar: Thank you.

Operator: And we will take a follow-up question from Carla Casella with JPMorgan.

Carla Casella: Hi. I am wondering if you can give us what covenant leverage or covenant EBITDA was for the quarter or the LTM?

Bruce Wacha: Yeah, it is a little bit higher. Just keep in mind, third quarter is our high number. So we are just over 6.4 times in the third quarter, which is higher than we were first quarter, second quarter. But as a reminder, it is about a half a turn less than where we were third quarter last year, with the third quarter being our seasonal working capital build.

Carla Casella: Perfect. Okay, thank you.

Bruce Wacha: Yep.

Operator: This concludes our question and answer session, and we will conclude today's teleconference. We thank you for your participation. You may disconnect your lines, and have a wonderful day.

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