Conagra Brands Inc.’s stock (CAG, -0.85%) experienced a 2.4% decline in premarket trading on Thursday following the release of disappointing second-quarter revenue and profit forecasts. Although the company delivered a better-than-expected quarterly profit, it failed to meet analyst estimates.
Second-Quarter Results
Conagra reported a slight decline of 0.1% in net income for the second quarter. The figure dropped to $478.7 million, or 60 cents per share, compared to $479.4 million, or 79 cents per share, in the same period last year. However, analysts had anticipated an adjusted profit of 68 cents per share, while Conagra achieved an adjusted profit of 71 cents per share.
Revenue and Outlook
The company’s revenue also fell short of expectations, decreasing by 3.2% to $3.21 billion. Analysts had predicted revenue of $3.23 billion for the second quarter. Looking ahead, Conagra provided an adjusted profit outlook for 2024, ranging from $2.60 to $2.65 per share. This projection falls below the FactSet consensus estimate of $2.68 per share.
Positive Developments and Challenges
Despite the disappointing numbers, Conagra highlighted positive trends within its domestic retail business. The company experienced a significant reduction in volume declines driven by inflation, cutting them in half compared to the previous quarter. Additionally, Conagra’s frozen food business achieved market share gains.
Future Prospects
Conagra expressed confidence in its ability to build momentum in the second half of the year and achieve a strong fiscal year in 2025. Although the company acknowledged the challenging macroeconomic environment, it remains optimistic about capitalizing on positive market trends and driving growth.
By staying committed to investment and innovation, Conagra aims to position itself for a prosperous future.
