Total sales grew 9.7% year-over-year to $2.38 billion, driven by Pinnacle acquisition. Sales missed the analysts’ estimates of $2.41 billion. Sales from Refrigerated & Frozen segment increased 1.7%, while sales from Grocery & Snacks, International and Food Service segments fell 0.1%, 5.4%, and 16.5%, respectively.
For the 31 days between the Pinnacle acquisition closing date and the Q2 end, net sales for the Pinnacle segment totaled $259 million. Net sales of Pinnacle were below expectations due to weak performance across a range of significant brands, as well as the impact of a product recall on Duncan Hines.
The Chicago-based firm, which completed the Pinnacle Foods acquisition on October 26, reaffirmed legacy Conagra outlook and updated total Conagra guidance for FY19. Legacy Conagra sales are expected to grow in the range of 0.5% to 1.5% and total Conagra sales are estimated to grow in the range of 22% to 23%. Total Conagra adjusted EPS from continuing ops is estimated to be $2.03 to $2.08.
Conagra shares crash after company misses estimates, guides lower
Conagra Brands expects to exceed Pinnacle-related cost synergy target of $215 million by the end of FY22. On a percentage basis, Conagra Brands expects the Pinnacle transaction to be low single-digit accretive to adjusted EPS in the fiscal year ended May 2020 and high single-digit accretive to adjusted EPS in the fiscal year ended May 2022.
Shares of Conagra have fallen 21% in the last three months and 23% in the past one year. The stock, which plunged to a fresh yearly low ($28.41) on Tuesday, ended Wednesday’s trading session by increasing 1.86% at $29.09.