When Conagra Brands Inc. (NYSE: CAG) released its fiscal first-quarter financial results before the markets opened on Thursday, the firm said that it had $0.43 in earnings per share (EPS) and $2.39 billion in revenue. That compared with consensus estimates of $0.38 in EPS and $2.48 billion in revenue, as well as the $0.47 per share and $1.83 billion posted in the same period of last year.
First-quarter net sales grew 30.3%, and organic net sales decreased by 1.7%. The net sales growth is primarily reflected by a 35.8% increase from the acquisition of Pinnacle.
The 1.7% decrease in organic net sales in the quarter was driven by a 2.5% volume decline behind unplanned softness in the International and Foodservice segments, as well as planned elasticity-driven declines in the Grocery & Snacks segment.
Looking ahead to the fiscal 2020 full year, the company expects to see EPS in the range of $2.08 to $2.18 and net sales growth of 13.5% to 14.0%. Consensus estimates call for $2.09 in EPS and $10.81 billion in revenue for the year.
Sean Connolly, president and CEO of Conagra, commented:
After one quarter, fiscal 2020 is on-track with our plan as we execute against each of the priorities we outlined previously: maintaining the momentum on Legacy Conagra, applying our value-over-volume playbook to Pinnacle, and delivering against our integration, synergy, and de-leveraging commitments. I am pleased that our domestic retail businesses outperformed our first quarter organic net sales growth plan. While our Foodservice and International businesses experienced unplanned softness on the top line this quarter, they outperformed our operating profit and margin expectations. We believe the first quarter net sales issues in these segments were discrete and are now largely behind us.
Shares of Conagra traded up 2% to $30.50 Thursday morning, in a 52-week range of $20.22 to $37.60. The consensus price target is $32.08.