Negative Points

• Net sales decreased 9.7% year-over-year to $383.3 million, primarily due to divestitures, with base business net sales down 2.9% in the quarter.

• The company incurred a net loss of $4 million in Q2 2026, driven by $9.7 million in acquisition and divestiture-related expenses.

• Specialty segment adjusted EBITDA decreased by $8.9 million due to unfavorable raw material costs, increased manufacturing expenses, and investment in Crisco oil pricing.

• Net interest expense increased 7.5% to $38.5 million due to higher debt levels and the 11% interest rate on new senior notes, with a 24-day period of double interest expense during refinancing.

• The pending divestiture of Green Giant Canada is still awaiting regulatory approval, creating uncertainty and delaying the completion of the portfolio reshaping.

• The company faces ongoing inflationary pressures, particularly in vegetable oil and freight costs, which could impact margins in the second half of the year.

• The timing of the Fourth of July holiday negatively impacted net sales by approximately $5 million to $7 million in the quarter.

Q & A Highlights

Q: Can you quantify how much the tariff refund benefited EBITDA in the quarter and what your expectation would be for that benefit for the full year? A: Bruce Wacha, CFO: We haven't disclosed the number, but it's relatively modest. We had about $8 million to $9 million of total incremental tariff exposure, of which we were the importer of record for a little less than half. That portion is largely what we got back in the second quarter. We expect to get some more back throughout the remainder of the year, and in certain cases, we'll invest that back into the business.

Q: On the last call, there was discussion around potential inflation building outside of soybean oil for Crisco. Where do you stand on inflation now, and what might that mean for pricing and elasticity? A: Bruce Wacha, CFO: Fuel and vegetable oil are still the largest areas of inflation we've seen so far this year, though they are a bit inside of their peak levels from the last call. There is a little bit coming in spices as well. We haven't seen people taking pricing on fuel costs, but we have seen it within vegetable oil. Our expectation is to cover that inflation where we can.

Q: Non-measured channels were up double digits last quarter but seem to be slowing. What is driving that, and how are you thinking about it for the second half? A: Bruce Wacha, CFO: We're still seeing pretty strong growth across our non-measured channels, including Canada, foodservice, and our private brands relationship within spices. This strength is offsetting some of the damage in the regular tracked channels. However, we need to improve the performance of our retail branded business, which is a key focus for our new CEO, Rob Mills.

Q: Scanner data shows spices under pressure, but strength in areas like Cream of Wheat. Can you comment on the wins and losses and where you see the most opportunity? A: Bruce Wacha, CFO: We're seeing pretty good trends in our hot breakfast portfolio, including Cream of Wheat, McCann's, and maple syrup. In spices, there is some noise from a shift in brands like Tone's and Weber from branded to partner brands, which creates distortion. We need to improve our performance across the board, having had good results in non-tracked channels but needing further improvement in tracked channels.

Q: Are Tone's and Weber shifting from brands to partner brands new? What is the rationale? A: Bruce Wacha, CFO: It's a continuation of what we've seen over time, similar to what happened after we bought the ACH business in 2016-2017. In a couple of spots, we're losing Tone's distribution, but it's being replaced with us providing distribution of similar products and SKU counts on the private brand side. We are keeping those brands and want to improve their performance.

Q: Collagen and Kitchen Basics sales were lighter than forecasted. Can you talk about early learnings on those acquisitions? A: Bruce Wacha, CFO: Sales for both are actually a little ahead of our forecast, though we may have been more conservative than you. There is some softness in collagen consumption, which we knew when we bought it. It's a #2 Northeast regional brand that was mispriced under prior ownership, and we are fixing that. Kitchen Basics continues to surprise us positively; we really like it and see growth opportunity with good margins. The true test will be integrating during the winter soup season.

Q: You've done a lot of heavy lifting on portfolio reshaping. Is there more to do, or are there pockets you want to accelerate? A: Bruce Wacha, CFO: There's always more to do at B&G. A big focus for the last 1.5 years has been the Green Giant strategic review, and we're nearing the end of that. We'll still look at things opportunistically from a divestiture standpoint, but I wouldn't put a big expectation there. We want and expect to do more acquisitions like Collagen and Kitchen Basics, which add nice incremental growth in sales and profitability.

Q: On the tariff refunds in the spices line, was that part of your original guidance or a mid-year put and take? A: Bruce Wacha, CFO: We always knew it was out there. It's probably a put and take as it factors in, and we've got a little bit of both here. We always do.

Q: What are the risks to the next two quarters that get you to the low or high end of the guidance range? A: Bruce Wacha, CFO: Within our guidance range, we're looking at flat to down 2% in base business net sales, plus or minus the M&A transactions. We're not looking for anything heroic and feel comfortable where we are. We're lapping the 53rd week from last year, but we feel we're on pace given where we are year-to-date.

Q: Has anything changed with the Green Giant Canada divestiture, or are we just waiting on the regulatory process? A: Bruce Wacha, CFO: We're just waiting on the regulatory process. We're chomping at the bit to get it completed, but it takes time. We expect it to close during the third quarter.

Q: Does the revenue guidance include the Canada business since it hasn't sold yet? And what will the proceeds be? A: Bruce Wacha, CFO: Yes, we'll include Canada in our numbers until the transaction is done. Proceeds will move around as inventory moves. We announced the transaction near peak inventory levels in the third quarter, but in Q2 we're near trough levels. As we enter pack season, inventory will be higher, so the value we receive will be higher, likely closer to the September of last year number.

Q: With the asset sales and acquisitions, are you sitting on stranded costs or do you need to add overhead for Collagen? What's a good run rate for SG&A? A: Bruce Wacha, CFO: You'll continue to see costs reduced into early third quarter, and then we should be largely at a run rate from there.

Q: Can you talk about the M&A environment? Are there assets you'd look at, or could you consider further asset sales

For the complete transcript of the earnings call, please refer to the full earnings call transcript .