Conagra Brands (CAG) - Get Conagra Brands, Inc. Report shares fell, even after the owner of iconic food brands like Hunt's and Vlasic reported stronger-than-expected earnings for its latest quarter, as consumers continued to gorge at grocery stores amid the coronavirus pandemic.
Sales at the Chicago foods major appreciated in all areas except food service, which has suffered from the shutdowns of and capacity constraints at restaurants and institutional cafeterias.
In the fiscal 2021 first quarter ended Aug. 30, net income totaled $329 million, or 67 cents a share, up 89% from $173.8 million, or 36 cents, in the year-earlier period.
Adjusted earnings per share hit 70 cents, exceeding analysts’ consensus estimate of 57 cents derived from a FactSet survey.
Conagra reported revenue of $2.68 billion, up 12% from $2.39 billion in the year-ago quarter. The latest figure topped the FactSet analyst consensus of $2.61 billion.
The company also boosted its dividend 29% to 27.5 cents a share from 21.25 cents, payable Dec. 2 to holders of record Nov. 2.
"Now that customers have begun rebuilding inventories and we have increased production capacity in certain areas of our business, we are selectively increasing our marketing support for the businesses where capacity permits," Conagra Chief Executive Sean Connolly said in a statement.
In the current quarter, Conagra said demand is rising in all areas except food service. The company expects sales to gain 6% to 8% in the quarter. It expects adjusted EPS of 70 cents to 74 cents. The FactSet survey is looking for 72 cents.
Conagra stock recently traded at $35.05, down 1.9%. The stock had gained 4% year to date through Wednesday. That matches the S&P 500’s gain.