By Senad Karaahmetovic
Conagra Brands (NYSE:CAG) boosted its full-year profit forecast after delivering better-than-expected FQ3 bottom-line figures.
The company posted EPS of $0.76 on revenue of $3.1 billion, beating the average analyst estimate for earnings of $0.64 per share on revenue of $3.09B. Revenue rose 5.9% year-over-year, boosted by the 5.6% increase in "Refrigerated & Frozen" net sales.
"We delivered another quarter of strong results reflecting the ongoing strength of our brands and successful execution of the Conagra Way playbook. Our top-line posted solid growth as we demonstrated strong pricing execution with modest elasticities," said Sean Connolly, president and chief executive officer of Conagra Brands.
Organic net sales rose 6.1%, missing the 6.3% consensus. On a more positive note, the adjusted operating margin increased by 320 basis points YoY to 16.9%, ahead of the 15.1% consensus.
FY profit guidance range is now set at $2.70-2.75, up from the prior $2.60-2.7 and better than the $2.67 estimate. The company expects its organic net sales will rise 7-7.5% while the adjusted operating margin is seen between 15.5-15.6%, up from the prior guidance of 15.3-15.6%.
"We remain committed to executing on our strategic business priorities including generating value for our shareholders."
Goldman Sachs analysts said the results were "better than what we and many investors we speak with were modeling."
"For 4Q, this implied largely in-line organic sales outlook, though it suggests EPS of $0.55-$0.60 (vs. GS/consensus $0.69/$0.65), which may be conservative in our view. All-in, we expect the stock to trade higher on strong growth momentum and solid margin delivery," the analysts said in a note.
CAG shares are down 2.9% year-to-date.