Conagra Brands Inc. (CAG) - Get Report posted stronger-than-expected fourth quarter earnings Tuesday, and forecast solid near-term sale growth, as the food brands group continues to see surge in demand from its retail clients.
Conagra, which makes the Mrs Butterworth's brand of maple syrup and the Healthy Choice line of ready meals, said adjusted earnings for the three months ending in May were pegged at 75 cents per share, well ahead of the Street consensus forecast of 65 cents and up more than 120% from last year. Group revenues, Conagra said, rose 25.8% to a Street-beating $3.3 billion.
Looking into the current financial year, which began on June 1, Conagra said it sees first quarter earnings in the region of 54 cents to 59 cents per share, noting that while COVID-19 costs are likely to continue to rise, the group has also seen a significant upswing it its retail business. Organic net sales, Conagra said, are likely to rise between 10% and 13%.
"We have effectively responded to elevated demand, continued to make good progress on improving the overall business, kept our synergy capture on-track, and begun to launch our fiscal 2021 innovation slate," said CEO Sean Connolly. "Not only did we invest to support demand during the quarter, we did it while significantly reducing our leverage."
"While we are optimistic about the long-term implications of recent consumer behavior shifts, given COVID-19 uncertainties, we are only providing guidance for the first quarter of fiscal 2021,"he added. "We intend to provide an update on our fiscal 2021 outlook next quarter."
Conagra shares rose 3.8% higher in early trading following the earnings release to change hands at $34.96 each, a move that would lift the stock into positive territory for the year.