Unlike most other businesses these days, which are pulling the guidance they may have issued just a month or two ago as a result of the coronavirus pandemic, Conagra Brands (NYSE:CAG) just announced it was anticipating exceeding its full-year sales and profit expectations.
The consumer products company said so long as its supply chain was not interrupted, the "significantly increased demand" it has experienced so far in its fiscal fourth quarter meant its results would come in higher than previously thought.
Restaurants down, retail up
Conagra actually reported third-quarter results that were much lower than a year ago. Sales of $2.56 billion were well below the $2.71 billion it recorded in 2019, and net income of $204 million, or $0.42 per share, was down from $242 million, or $0.50 per share.
Even though Conagra expects its foodservice division, which services restaurants and similar broadline outlets, to be hit by the pandemic, having suffered an 8% drop in sales in the third quarter and a 26% decline in profits, its retail segment is doing robust business with fourth-quarter sales and shipments surging 50% so far.
President and CEO Sean Connolly said in a statement, "While we are still early in our fourth quarter, we have seen significantly elevated demand for our retail products as consumers have started filling their pantries for more at-home eating."
Conagra increased its organic net sales growth for the fiscal year to be above the 0.5% increase it previously guided toward with adjusted operating margins also coming in higher than the 16.2% gain it had forecast before. Adjusted earnings per share would also be higher than the $2.07 per share it previously said would be the high end.