Conagra Brands beats profit estimates on strong snack, frozen food demand

Conagra Brands topped Wall Street quarterly sales and profit estimates on Thursday, helped by strong demand for the Slim Jim maker’s snacks and frozen foods, sending its shares up about 8%.

The company has been investing to revive brands it had bought as part of its Pinnacle Foods acquisition, including Birds Eye and Duncan Hines.

Conagra has also been pouring money into brands it had owned prior to the $8 billion Pinnacle purchase, launching a spate of products including professional wrestler Randy Savage-themed Slim Jim meat stick, to fend-off competition from private labels.

The Chicago, Illinois-based company also raised its forecast for annual cost synergies from its Pinnacle acquisition to $305 million by the end of fiscal 2022 from $285 million, and said it planned to invest savings to help drive sales.

Sales in its grocery and snacks segment grew 14.2% in the second quarter, while its refrigerated and frozen food segment grew 28.8%.

Excluding items, Conagra earned 63 cents per share, beating the average analysts’ estimate of 57 cents, according to IBES data from Refinitiv.

Net income attributable to the company nearly doubled to $260.5 million, or 53 cents per share, in quarter ended Nov. 24, from a year earlier.

Net sales rose 18% to $2.82 billion, largely due to Conagra’s acquisition of Pinnacle last year, beating the average analysts’ estimate of $2.80 billion.