Key facts
- Conagra Brands beat Wall Street estimates for first-quarter profit and sales.
- Adjusted earnings per share were 41 cents, compared with analysts' estimates of 28 cents.
- Net sales were $2.60 billion, compared with estimates of $2.59 billion.
- The company reaffirmed its annual sales and profit forecasts.
- Demand for pantry staples like Slim Jim meat snacks supported results.
- Conagra's shares were up 2% in premarket trading.
Conagra Brands Inc. exceeded Wall Street's expectations for both profit and sales in its first quarter, driven by resilient consumer demand for its packaged food products, including its popular Slim Jim meat snacks. The company's shares rose 2% in premarket trading following the announcement.
Budget-conscious consumers are continuing to prepare more meals at home due to elevated living costs and economic uncertainty, which has supported demand for packaged food companies like Conagra. The company reported adjusted earnings per share of 41 cents, surpassing analysts' estimates of 28 cents, according to data compiled by LSEG. Conagra's net sales for the quarter ended August 30 reached $2.60 billion, slightly above the $2.59 billion estimated by analysts. The company also reaffirmed its full-year sales and profit forecasts.
However, StockStory analysts hold an "Underperform" rating on Conagra, citing three-year annual revenue declines of 2.8% and expectations for further sales decreases over the next 12 months. They suggest the company may need strategic adjustments or mergers and acquisitions to accelerate growth and view its current valuation as a potential value trap due to its perceived lower quality.