Shares of Conagra Brands, Inc. (NYSE: CAG) up over 3.4 percent after the company reported better-than-expected quarterly earnings, also touching record highs of $39.40. The company reported EPS of $0.49, beating by $0.04, but missed revenue by $20M.
Sean Connolly, president and chief executive officer of ConAgra Brands, commented, "We are successfully reshaping our portfolio, capabilities, and culture. Our increased focus and discipline on driving value over volume are enabling us to expand our margins as we build a higher-quality revenue base, improve efficiency, and deliver stronger, more consistent performance."
He added, "We expect to improve sales growth trends in the second half of the fiscal year as we begin to lap the pricing and trade actions we undertook last year. Accordingly, we are reaffirming the fiscal 2017 guidance we provided at our investor day on Oct. 18, 2016."
- Net sales decreased 11.5%, largely driven by the Company's continued progress in building a higher quality revenue base. The Company estimates that the impacts of divestitures and foreign exchange lowered sales by 5.5%.
- Gross margin (net sales less cost of goods sold as a percent of net sales) expanded 270 basis points, and adjusted gross margin expanded 250 basis points.
- The Company completed the spin-off of Lamb Weston in the quarter. Lamb Weston has been re-classified as discontinued operations for all periods presented.
The Company is reaffirming its fiscal year 2017 outlook. The Company expects net sales to decrease between 4% and 5% (excluding the impacts of divestitures), and to achieve adjusted gross margin of 30.4% to 30.6%, adjusted operating margin of 15.3% to 15.5%, and adjusted EPS of between $1.65 and $1.70.