Conagra Brands Beats Q3 Earnings Estimates, Raises Margin Outlook

Conagra Brands beats Q3 expectations with earnings of 69 cents per share on $3.03 billion sales, shares jump 4.5%.

By Bill Bullington

4/4, 08:53 EDT
ConAgra Brands, Inc.

Key Takeaway

  • Conagra Brands' Q3 earnings beat estimates with 69 cents per share on $3.03 billion sales, boosting stock by 4.5%.
  • Company raises fiscal year margin outlook to 15.8%, reflecting confidence in operational efficiency and cost management.
  • Positive investor response as shares reach $30.36 in premarket trading, indicating strong market confidence in future prospects.

Earnings Overview

Conagra Brands, the parent company of popular snack brands such as Reddi Wip, Slim Jim, and Orville Redenbacher’s, reported fiscal third-quarter earnings that surpassed analysts' expectations. The company announced earnings of 69 cents per share on sales of $3.03 billion for the quarter ended February 25, exceeding the FactSet consensus estimates of 65 cents a share on revenue of $3 billion. This performance reflects a positive trend in the company's financial health, with Chief Executive Sean Connolly attributing the success to improved volume trends in the domestic retail business, particularly in the frozen segment, which generated strong lifts and unit share gains.

Segment Performance

The earnings report highlighted mixed results across Conagra's various segments. The grocery and snacks segment experienced a sales increase of 3.4% from the previous year, indicating robust performance in this area. However, the refrigerated and frozen segment saw a decrease in sales by 8.1%, attributed to lower prices. Despite the mixed segment performance, the overall positive earnings outcome demonstrates Conagra's ability to navigate market challenges effectively.

Financial Outlook

Conagra has raised its margin outlook for the fiscal year to 15.8% from the previously forecasted 15.6%, signaling confidence in its operational efficiency and cost management strategies. Additionally, the company reaffirmed its earnings guidance for the year, projecting earnings between $2.60 and $2.65 per share. This guidance reflects the company's optimistic view of its financial performance and strategic initiatives moving forward.

Market Reaction

Following the announcement of the fiscal third-quarter earnings, shares of Conagra gained 4.5% in premarket trading, reaching $30.36. This positive market reaction underscores investor confidence in Conagra's financial health and future prospects. Coming into the session, Conagra's stock had risen 1.4% this year, further indicating a favorable outlook among investors.

Management Quotes

  • Sean Connolly, CEO of Conagra:

    "Volume trends in our domestic retail business continued to improve as targeted investments, particularly in frozen, generated strong lifts and unit share gains."