Shares of Conagra Brands Inc. fell toward a more than three-year low Thursday, after the food brands company reported a fiscal first-quarter profit that rose above expectations, while sales fell a bit short amid weakness in its refrigerated and frozen foods business.
The company CAG,
Excluding nonrecurring items, adjusted earnings per share rose 15% to 66 cents, above the FactSet consensus of 60 cents.
Sales inched less than 0.1% lower to $2.904 billion, below the FactSet consensus of $2.951 billion. Price and mix increased 6.3%, but volume dropped 6.6%, “largely due to industry-wide slowdown in consumption and recent consumer behavior shifts,” the company said.
The stock initially jumped as much as 2.3% after the results were released, before reversing course to be down 1.1% in premarket trading. That put the stock to open around the lowest closing price seen since March 2020.
Within Conagra’s business segments, grocery and snacks sales increased 1.2% to $1.2 billion, as price/mix rose 5.6% while volume fell 4.4%. Refrigerated and frozen sales decreased 4.6% to $1.2 billion, as 5.9% rise in price/mix was offset by a 10.5% fall in volume.
International sales rose 11.4% to $260 million, with price/mix up 7.9% and volume up 0.3%.
Cost of goods sold declined 4.7% to $2.08 billion, helping boost gross margin by 3.54 percentage points to 28.3%.
For fiscal 2024, the company reiterated its adjusted EPS guidance range of between $2.70 and $2.75, which surrounds the current FactSet consensus of $2.71.
Conagra’s stock has dropped 21.2% over the past three months through Wednesday, while the Consumer Staples Select Sector SPDR ETF XLP has shed 8.4% and the S&P 500 index SPX has lost 4.1%.
