Conagra Brands Releases Third Quarter Results, CEO Comments

Conagra Brands has revealed results for its third quarter in fiscal year 2019. The company noted impressive growth after last year's acquisition of Pinnacle Foods, with net sales increasing 35.7%. And investors took note—as the company's stock soared more than 10% the morning of the announcement.

"Our Legacy Conagra business generated solid growth during the third quarter and delivered strong performance in our domestic retail segments,” Sean Connolly, President and CEO commented. “We saw continued improvement in consumption trends and base sales velocity, and organic net sales grew nearly two percent during the quarter. Our brand building and innovation actions over the past several years have resulted in strong growth in our frozen and snacks portfolios, and we remain focused on applying this disciplined approach across our portfolio."

According to a statement released by the company, the net sales growth reflects a 34.3 percentage point net benefit from the acquisitions of Pinnacle Foods and Sandwich Bros. of Wisconsin, the divestiture of the Canadian Del Monte business, and the sale of Trenton.

"The integration of Pinnacle Foods, and the reinvigoration of its innovation pipeline, remain squarely on-track,” Connolly added. “We are aggressively applying our proven 'Conagra Way' to address the executional challenges in the Birds Eye, Duncan Hines, and Wish-Bone businesses. While it will take some time to return these Pinnacle businesses to growth, we are confident that we have identified the issues and have the right action plans in place to improve the performance of these terrific brands. We have tremendous confidence in the long-term value creation potential of Conagra Brands and look forward to providing a comprehensive update at our upcoming Investor Day on April 10."

Highlights from the company’s Q3 2019 growth include:

• Organic net sales excluding the sale of the Trenton, Missouri production facility (Trenton) increased 1.9%
• The Grocery & Snacks segment grew net sales by 2.9% behind continued strong performance in the Legacy Conagra snacks business
• The Refrigerated & Frozen segment continued its positive momentum in the third quarter, with net sales growth of 3.3% and organic net sales growth of 2.4%, driven by innovation
• Diluted earnings per share (EPS) from continuing operations was $0.50, and adjusted diluted EPS from continuing operations was $0.51 in the quarter. Solid operating performance in Legacy Conagra continued. Taxes, interest expense, and lower joint venture earnings associated with Legacy Conagra in the quarter, and the dilutive impacts of Pinnacle, reduced overall EPS
• Conagra Brands also noted that the integration of the Pinnacle business, which was acquired in October 2018, remains on track. The company realized approximately $12 million of cost synergies in the quarter and continues to expect to exceed its previously-announced $215 million cost synergy target.Conagra Brands reduced debt by $685 million since the end of the second quarter

According to analysis from Nasdaq, Conagra Brands' stock surged on the news that the company reported fiscal third-quarter adjusted earnings of $0.51 per share—two cents above estimates. And the company reaffirmed a full-fiscal-year guidance for earnings of between $2.03 and $2.08 per share.

To learn more, read Conagra Brand’s statement in its entirety here.

For more updates on Conagra Brands and other financial results, keep reading Deli Market News.