Conagra Brands tops analysts’ estimates in Q4 as COVID-19 fuels home dining

Conagra Brands tops analysts’ estimates in Q4 as COVID-19 fuels home dining
  • Conagra Brands tops analysts’ estimates in Q4 as COVID-19 fuels home dining.
  • The U.S. food company refrains from giving full-year financial guidance.
  • The Healthy Choice-owner is currently 3% up year to date in the stock market.

Conagra Brands (NYSE: CAG) released its quarterly financial results on Tuesday that topped analysts’ estimates for earnings and revenue in the fiscal fourth quarter. The company attributed hawkish earnings to the Coronavirus pandemic that fuelled demand for home dining in recent months. Earlier in June, Conagra launched a careful review of its Mrs. Butterworth’s brand.

Shares of the company were reported about 6% up in premarket trading on Tuesday. At £28 per share, Conagra is currently about 3% up year to date in the stock market after recovering from a low of £19.64 per share in March. Learn more about how can you start trading on the stock market.

Conagra’s Q4 financial results versus analysts’ estimates

The owner of prominent food brands like Healthy Choice and Birds Eye recorded its net income at £163.86 million in the fourth quarter that translates to 33.36 pence per share. In the same quarter last year, the company had reported its net income at a much lower £102.92 million or 21.15 pence per share.

In terms of adjusted earnings per share, the Chicago-based company printed 61.02 pence in the quarter that ended on 31st May versus the experts’ forecast of 53.70 pence as per FactSet. At £2.68 billion, Conagra’s sales in the recent quarter came in stronger than the year-ago figure of £2.13 billion. Analysts, on the other hand, were expecting the American packaged foods company to generate £2.57 billion of sales in the fourth quarter.

Conagra refrains from giving full-year financial guidance

CEO Sean Connolly of Conagra Brands commented on the earnings report on Tuesday and said:

“Our business clearly benefited from increased at-home eating in the fourth quarter, as the elevated retail demand outweighed the reduced foodservice demand. In retail, many consumers tried our modernised products for the first time and then returned for more.”

Connolly also expressed confidence that the change in consumer behaviour was likely to sustain in the upcoming months but cited COVID-19 uncertainties for only giving financial guidance for the fiscal first quarter. The full-year guidance, the CEO added, will be available at the end of Q1.  

For the first quarter, the company now estimates 43.94 pence to 48 pence of adjusted earnings per share versus the analysts’ estimate of 43.94 pence per share.

Conagra performed fairly upbeat in the stock market last year with an annual gain of more than 50%. At the time of writing, the U.S. food company is valued at £13.35 billion and has a price to earnings ratio of 21.47.

By Wajeeh Khan
Mr. Khan specialises in Public Health by academia but is a trader by passion. Taking up two new hobbies of writing and trading in his teen years, he is now a professional trader and news writer with over 5 years of experience in various financial markets. Khan is passionate about bringing insightful articles to his readers and hopes to add value to their portfolios.
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