Conagra Brands' Better-Than-Expected Quarter and CEO's Outlook
On Conagra's better-than-feared quarter
In its fiscal 2024 third quarter, Conagra Brands' net sales declined 1.7% year over year to $3.03 billion, including a 0.3% tailwind from currency exchange rate moves and a 2% organic sales decline. That translated to a 10.1% decrease in adjusted (non-GAAP) earnings to $329 million, or $0.69 per share.
Analysts, on average, were only expecting adjusted earnings of $0.65 per share on roughly the same revenue.
Conagra CEO Sean Connolly said the quarter reflected 'steady progress from strong execution.' He added that volume trends in the company's domestic retail business have continued to improve, with particular strength attributable to targeted investments in the refrigerated and frozen foods segment.
What's next for Conagra investors?
Given its relative outperformance in the quarter, Conagra also increased its fiscal-year adjusted operating margin guidance from 15.6% previously to roughly 15.8%. Conagra reiterated its previous outlook for organic net sales to decrease between 1% and 2%, which should result in adjusted earnings per share of between $2.60 and $2.65 for the fiscal year.
In the end, this moderately stronger-than-expected performance from Conagra Brands helped alleviate investors' concerns about the impact of inflation on consumer staples stocks. With shares of Conagra Brands roughly flat so far in 2024 -- but also down around 20% over the past year -- it’s hardly surprising that the stock climbed in response to Thursday's report.
Should you invest $1,000 in Conagra Brands right now?
- The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Conagra Brands wasn’t one of them.
- The 10 stocks that made the cut could produce monster returns in the coming years.
- Stock Advisor provides investors with an easy-to-follow blueprint for success, including guidance on building a portfolio, regular updates from analysts, and two new stock picks each month.
This article was prepared using information from open sources in accordance with the principles of Ethical Policy. The editorial team is not responsible for absolute accuracy, as it relies on data from the sources referenced.