- Conagra Brands, a packaged-food company, announced fourth-quarter results that missed analysts' expectations. The company also lowered its expected earnings for 2020.
- In a press release, the company said "several discrete items negatively impacted top line growth."
- One silver lining is the Gardein brand of plant-based meat alternatives that competes with Beyond Meat and Impossible Foods.
- Watch Conagra trade live on Markets Insider.
The maker of household brands including Hunt's tomato paste, Slim Jim beef jerky, and Duncan Hines cake mixes is the latest packaged-food company to release disappointing earnings results.
Shares of Conagra Brands traded down by as much as 8.4% in pre-market trading Thursday after the company reported fourth-quarter and full fiscal 2019 earnings that missed analysts' expectations.
Here are the key numbers:
- Adjusted earnings per share: $0.36 reported versus $0.41 expected
- Sales: $2.61 billion reported versus $2.66 billion expected
General Mills and McCormick also recently released earnings results that missed forecasts.
Conagra's sales struggled as "several discrete items negatively impacted top line growth," earnings statement said. Sales in the key grocery and snacks segment fell 7.1% and organic net sales declined 0.7% .
"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 Sean Connolly, president and CEO of Conagra Brands, in a company statement.
The company added that "unexpected merchandising changes" and "elasticity-related declines" hurt its Hunt's and Chef Boyardee brands. A recall of P.F. Chang products and weak Marie Callender's sales also hurt the company's numbers.
The company also lowered its full year 2020 earnings per share guidance to $2.08-$2.18 from $2.10-$2.20 citing the divestiture of Gelit, an Italy-based maker of frozen pasta.
"All in this was a far worse quarter than investors we spoke with were anticipating," wrote Ken Golman of JPMorgan in a note Thursday. The only silver lining, he wrote, is the company's focus on its Gardein brand, which it took ownership of when it acquired Pinnacle Foods.
The acquisition of Pinnacle Foods boosted the company's net sales, which increased by 32.9%. The Gardein brand is its own line of plant-based meat alternatives that compete with Beyond Meat and Impossible Foods. The company said it is "as optimistic as ever" about the merger and the opportunity in plant-based meat alternatives, which is larger than it had previously forecasted. Analysts have estimated that the $14 billion industry could balloon to $140 billion in the next decade.
Shares of Conagra Brands are up 37% year-to-date.
