Conagra Shares Fall After Q4 and Full Year 2019 Financial Results

Shares of American packaged foods company Conagra saw its shares slip on Thursday after the company announced fiscal fourth quarter results and full-year 2019 earnings that fell below expectations.

The stock was down almost 12% at $25.57 in late morning trading on the New York Stock Exchange on Thursday.
For the fiscal fourth-quarter, the Chicago-based company reported adjusted net income of $175 million, or 36 cents a share. This is compared to the $196 million, or 50 cents a share, in the comparable year-earlier quarter. For the full fiscal year, Conagra said it earned $892 million, or $2.01 an adjusted share, up from $808.4 million, or $1.98 an adjusted share, a year earlier. Expectations had called for $2.06 a share according to FactSet.

“While our results in the fourth quarter were below expectations, we did make good progress in key areas of the business,” CEO Sean Connolly stated. He pointed to “transitory events” including increased competition as well as “isolated manufacturing-related challenges, and weak performance in our Ardent Mills joint venture.”

“Much of our progress was overshadowed by transitory events, including intensified promotional competition in certain categories, several isolated manufacturing-related challenges, and weak performance in our Ardent Mills joint venture,” said Connolly.

The company also said that “unexpected merchandising changes” and “elasticity-related declines” hurt its Hunt’s and Chef Boyardee brands. Conagra also cited that a recall of P.F. Chang products and weak Marie Callender’s sales also hurt the company’s numbers.

“All in this was a far worse quarter than investors we spoke with were anticipating,” wrote Ken Golman of JPMorgan.
Conagra also lowered its outlook and now expects full year 2020 earnings per share guidance to $2.08-$2.18 from $2.10-$2.20.

Disclaimer: We have no position in Conagra Brands Inc. (NYSE: CAG) and have not been compensated for this article.