Shares of Conagra Brands Inc. CAG jumped 4.5% toward a near six-year high after the branded food company, with brands including Birds Eye, Healthy Choice and Reddi-wip, reported fiscal second-quarter profit and sales that rose above expectations and boosted its full-year outlook, as raised prices helped offset a decline in volume. Net income for the quarter to Nov. 27 rose to $381.9 million, or 79 cents a share, from $275.5 million, or 57 cents a share, in the year-ago period. Excluding nonrecurring items, adjusted earnings per share of 81 cents beat the FactSet consensus of 66 cents. Sales grew 8.3% to $3.31 billion, above the FactSet consensus of $3.28 billion. Organic sales increased 8.6% even as volume fell 8.4%, because price/mix increased by 17.0%, driven by “inflation-driven” pricing actions. “The volume decrease was primarily a result of the elasticity impact from inflation-driven pricing actions; however, the elasticity impact was favorable to expectations,” the company said in a statement. For fiscal 2023, the company raised its growth guidance for adjusted EPS to 10% to 14% from 1% to 5%, with expected adjusted EPS of between $2.60 and $2.70 above the FactSet consensus of $2.47. The stock, which is on track to open at the highest price seen since April 2017, has rallied 14.4% over the past three months through Wednesday, while the S&P 500 SPX has tacked on 1.8%.
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