Why Conagra Brands Stock Jumped Today

Shares of Conagra Brands (NYSE: CAG) climbed 5.4% on Thursday after the consumer packaged goods company announced stronger-than-expected quarterly results before the opening bell.

On Conagra's better-than-feared quarter

In its fiscal 2024 third quarter, which ended Feb. 25, 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.

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Steve Symington has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


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