Shares of Conagra Brands Inc. $(CAG)$ jumped 5.5% toward an eight-month high in premarket trading Thursday, after the food brands company reported fiscal third-quarter profit and sales that beat expectations, amid strength in the grocery and snacks business and as cost cutting helped boost gross margins. The company, with brands including Duncan Hines, Healthy Choice, Hunt's and Reddi Wip, said net income for the quarter to Feb. 25 fell to $308.6 million or 64 cents a share, from $341.7 million, or 71 cents a share, in the same period a year ago. Excluding nonrecurring items, adjusted earnings per share of 69 cents beat the FactSet consensus of 65 cents. Sales declined 1.7% to $3.03 billion, but topped the FactSet consensus of $3.01 billion. Gross margin improved 1.14 percentage points to 28.3%. Among the company's business segments, grocery and snacks sales grew 3.4% to $1.3 billion, refrigerated and frozen sales dropped 8.1% to $1.2 billion and foodservice sales declined 1% to $273 million. Looking ahead, the company nudged up its full-year adjusted operating margin outlook to 15.8% from 15.6% and affirmed its adjusted EPS guidance range of between $2.60 and $2.65. The stock has tacked on 1.4% year to date through Wednesday, while the Consumer Staples Select Sector SPDR ETF $(XLP)$ has gained 3.5% and the S&P 500 has advanced 9.3%.
-Tomi Kilgore
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April 04, 2024 07:43 ET (11:43 GMT)
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