Reddi-wip Owner Conagra Brands’ Stock Slides as Inflation Leads to Lowered Outlook
Key Takeaways
Conagra Brands (
CAG
) shares slid Thursday after the food giant lowered its profit outlook, citing a “challenging consumer environment.”
CEO Sean Connolly said higher-than-expected
inflation
and “unfavorable” foreign exchange rates would negatively affect earnings in the second half of its fiscal year.
To account for those headwinds, Conagra updated its full-year outlook, expecting
organic net sales
to come in near the midpoint of its previous range of flat to down 1.5% and lowering its adjusted
earnings per share (EPS)
range to $2.45 to $2.50, down from $2.60 to $2.65 previously.
Conagra has
noted the challenging environment
and hesitant consumers in
several of its recent quarters
, and also has
looked to cut costs
to compensate.
The owner of dozens of brands like Duncan Hines, Chef Boyardee, Slim Jim, and Reddi-wip reported second-quarter revenue of $3.2 billion, down about 0.4% year-over-year but above the $3.15 billion analysts had expected, according to estimates compiled by Visible Alpha. Conagra’s
net income
fell short, as it also decreased from last year to $284.5 million, while analysts had expected growth to $317.7 million.
After the food maker adjusted for one-time costs like
restructuring charges
, Conagra reported $337 million in
adjusted net income
, better than the $323.1 million that
analysts had projected
.
Conagra shares were down close to 2% Thursday afternoon, and have lost about 6% so far this year.
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