Why Is Packaged Goods Company ConAgra Brands Stock Shooting Higher Today?

ConAgra Brands Inc CAG reported a third-quarter FY24 sales decline of 1.7% year-on-year to $3.03 billion, beating the analyst consensus estimate of $3.01 billion.

The 2% decrease in organic net sales was driven by a 0.2% negative impact from price/mix, largely driven by the company’s strategic investments in the quarter, and a 1.8% decrease in volume, primarily due to continued lower consumption trends.

Grocery & Snacks segment sales increased 3.4% Y/Y to $1.3 billion, and Refrigerated & Frozen segment sales declined 8.1% Y/Y to $1.2 billion.

Adjusted EPS of $0.69 beat the consensus estimate of $0.65.

Adjusted gross profit rose 0.1% to $870 million. The gross margin increased 114 basis points Y/Y to 28.3%, and the adjusted gross margin increased 52 basis points to 28.7%.

Adjusted operating margin contracted 49 basis points Y/Y to 16.4%. The company reported $387 million in selling, general, and administrative expenses, an 11% increase Y/Y. Adjusted EBITDA of $634 million decreased 5.3% Y/Y.

Cash and equivalents totaled $78.5 million as of February 25, 2024.

“Outstanding progress on our cost savings initiatives allowed us to support strategic investments in our brands while sustaining margin recovery,” said President and CEO Sean Connolly.

Outlook: ConAgra reaffirmed its outlook for FY24 Organic net sales to decrease between 1.0% and 2.0% compared to fiscal 2023.

The company continues to see Adjusted EPS to be between $2.60 and $2.65 against an estimate of $2.60.

ConAgra increased FY24 adjusted operating margin outlook to about 15.8%.

Price Action: CAG shares are trading higher by 4.92% at $30.49 in premarket on the last check Thursday.

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