Reasons Why Conagra Brands, Inc. Stock Is Surging Today

Conagra Brand firms(Conagra) Brands (New York Stock Exchange)Stock Code(CAG)Shares climbed 5.41 TP3T on Thursday after the company announced stronger-than-expected quarterly business results ahead of rock bottom.

About Conagra Better Than Expected Quarterly Performance

For the third quarter of fiscal 2024 ended February 25, Conagra Brands' net sales declined 1.71 TP3T year-over-year to $3.03 billion, which included a 0.31 TP3T tailwind from foreign exchange rate changes and a 21 TP3T decline in organic sales. This resulted in a decline in adjusted (non-GAAP) earnings of $329 million, or $0.69 per share, down 10.11 TP3T.

Analysts on average expect adjusted EPS of $0.65 on roughly the same revenue.

Sean Connolly, Conagra's chief executive officer, said the quarter's business results reflected "steady progress from strong execution." He added that volume trends in the company's domestic retail business continued to improve, with targeted investments in the refrigerated and frozen foods sector in particular delivering strong growth.

What's next for Conagra investors?

Conagra also increased its adjusted operating margin guidance for the current fiscal year to approximately 15.8%, up from 15.6%. Conagra reaffirmed its previous outlook for organic net sales to decline by 1% to 2%, which would result in adjusted EPS for the current fiscal year of between $2.60 and $2.65. This would result in adjusted earnings per share of between $2.60 and $2.65 for the current fiscal year.

Ultimately, Conagra Brands' slightly stronger-than-expected performance helped ease investors' concerns about the impact of inflation on consumer staples stocks. 2024 year-to-date, Conagra Brands shares are essentially flat, but they're also down about 20% over the past year, so it's not surprising that the stock climbed after Thursday's report.

Should you invest $1,000 in Conagra Brands now?

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Steve Symington does not own any of the shares listed above.The Motley Fool does not own any of the shares listed above.The Motley Fool has a disclosure policy.

Why is Conagra Brands stock soaring today?