A Yahoo Finance Live anchor discusses Conagra Brands’ stock rally after Q2 earnings.
video transcript
[AUDIO LOGO]
Brad Smith: Let’s also talk about Conagra Brands stocks. Ticker symbol CAG. Here, early in the trade, these are up about 5%. This follows earnings outperformance in both sales and earnings as the food company’s net sales increased 8.6% year-over-year.
The company also raised its guidance for fiscal year 2023. This is because we expect organic net sales growth of 7% to 8% for the full year. That’s part of what we had in the quarter, net sales growth, but also a strong snacks business.
Brian Sotzi: Get this, brace yourself, Conagra’s frozen food business is really starting to heat up.
Julie Hyman: No.
Brian Sotzi: –In terms of profit.
Julie Hyman: No, sorry.
Brian Sotzi: We talked about Constellation Brands still showing high levels of inflation, as this is the second straight quarter for Conagra Brands as inflation began to fall significantly from its highs. And it’s making an impact. It’s really impacting the operating margins of the Grocery and Snacks segment and the Chilled and Frozen segment.
Grocery & Snacks operating profit increased 36.6%. The refrigerated and frozen segment increased profit by 48.6%. These are growth rates not seen in many Conagra competitors.
Julie Hyman: You know, I was talking about Constellation’s operating margin, or was it with Walgreens?
Brian Sotzi: It wasn’t about Bed Bath & Beyond. they don’t have any–
Julie Hyman: — It’s melted into your brain.
Brian Sotzi: –Margin, Julie. they have no margin.
Julie Hyman: Regardless, Conagra’s adjusted operating margin is 17%. Analyst estimates were just 14.7%. This is a pretty impressive beat. In a statement, the company said it would take decisive action to offset inflation. That means reducing costs and increasing prices. And it seems to have worked for them.
Brad Smith: Absolutely.
Brian Sotzi: They have done a good job improving many of their frozen meals.
Brad Smith: yes?
Brian Sotzi: they are really good Contains quinoa. they are delicious No more nasty, frozen taste. I’m all about Conagra. i feel them
Brad Smith: Then I have to be a fan of quinoa.
Brian Sotzi: Quinoa.
Brad Smith: Quinoa.
Brian Sotzi: Not a fan of quinoa?
Julie Hyman: Quinoa is great.
Brian Sotzi: Quinoa is great.
Julie Hyman: yes.
Brian Sotzi: All right, 2 to 1.
