PARSIPPANY, NJ. — B&G Foods, Inc. net income nosedived in the recent quarter as the company experienced continued pressure from higher input and operating costs.

“Simply put, our pricing actions have not yet caught up to the higher inflation flowing into our cost of goods sold,” said Kenneth Charles Keller, president and chief executive officer of B&G Foods, during an Aug. 4 conference call with investment analysts. “Within the quarter, we saw improvement in June results after a tough April, May behind some early realization from pricing implemented in June, and we expect to see further improvements starting in mid-July with additional pricing actions across the portfolio.”

Net income for the second quarter ended July 2 plunged to $256,000, which compared with net income of $24.6 million, equal to 38¢ per share on the common stock, in the prior-year period. During the quarter, the company recorded acquisition and integration expenses and paid a fee to amend its senior secured credit agreement. Excluding those impacts, adjusted net income was $5.1 million, which compared with $27.1 million.

Net sales totaled $479 million, up 3.1% from $464.4 million the year before. The increase was due to increases in net pricing and the impact of product mix, partially offset by volume declines.

“Volume declines were primarily driven by supply chain challenges, lower than normal fill rates and modest elasticity,” said Bruce C. Wacha, chief financial officer. “We will continue to monitor our brands to measure the negative impact of elasticity resulting from our pricing initiatives. But so far, we remain encouraged that elasticities remain modest relative to our historical models and current expectations. In fact, our two largest brands, Green Giant and Crisco, benefited from increased volumes during the quarter despite sizable cost-driven price increases.”

Declining spices and seasonings sales also affected results.

“B&G's spices and seasonings portfolio was down versus last year, impacting volume and mix in Q2 results,” Mr. Keller said. “Key drivers were the overall category contraction against elevated pandemic demand in early 2021 as well as supply and customer service issues related to Q1 disruptions and labor shortages in our Ankeny spices and seasonings facility. Customer service levels have now significantly improved and recovered to over 92% in July.

“Despite the recent trend, both the category and our spices and seasonings are up double digits versus pre-pandemic levels. We are also seeing improved trends in most recent month results.”

Excluding net sales from acquisitions and discontinued brands, base business net sales were $478.3 million, up 3.2% from $463.6 million.

Net sales of Crisco increased 23%. Net sales of Green Giant were up 5.9%, and Cream of Wheat sales grew 22%. Clabber Girl sales grew 8.7%. Net sales of Ortega decreased 12% from the prior year, largely driven by the company’s exit of a low-margin and unprofitable private label taco shell business. Still, the business continues to have elevated sales relative to pre-pandemic levels, Mr. Wacha said.

Executives expressed cautious optimism with regards to the remainder of the year, reaffirming full-year guidance for net sales at a range of $2.1 billion to $2.14 billion. However, adjusted diluted earnings per share are now expected to be in a range of $1.08 to $1.28, down from the previous guidance of $1.65 to $1.75.

“We are hoping for at least a pause in the levels of inflationary pressures that we are seeing in certain input costs,” Mr. Wacha said. “Obviously, any input cost relief would be favorable to plan and an additional wave of inflation would have a negative effect, although many of our costs for the year are largely locked in at this point.

“Our supply chain situation and customer fill rates are also improving and are expected to be a tailwind for the remainder of the year, but we still operate in a volatile world that has seen stresses and may continue to see stresses on the global supply chain.”

Management recently announced plans to restructure the company into four business units, Spices and Seasonings, Meals, Frozen and Vegetables, and Specialty, effective Aug. 1. The reorganization is expected to help the company mitigate some of its current challenges.

“We have to get better and faster on projecting future cost increases as well as pricing against them,” Mr. Keller said. “That is something that we're going to get better at in the business unit structure, and we're designing that capability to do that.”