Birds Eye, Slim Jim parent Conagra stock rallies after adjusted profit, sales beat expectations

Shares of Conagra Brands Inc. CAG, -3.67% rallied 3.1% in premarket trading Thursday, after the foods company, which brands include Birds Eye, Health Choice, Slim Jim and Reddi-wip, reported fiscal first-quarter adjusted profit and revenue that beat expectations, as improved supply-chain productivity helped offset cost-of-goods cost inflation. For the quarter to Aug. 28, the company swung to a net loss of $77.5 million, or 16 cents a share, from net income of $235.4 million, or 49 cents a share, in the year-ago period. Excluding nonrecurring items, such as goodwill and brand impairment charges, adjusted earnings per share of 57 cents beat the FactSet consensus of 52 cents. Sales grew 9.5% to $2.90 billion, above the FactSet consensus of $2.85 billion, as grocery and snacks sales rose 10.5% and refrigerated and frozen sales increased 9.6%, while international sales fell 1.3%. Cost of goods sold rose 10.3% to $2.18 billion, as gross margin contracted to 24.8% from 25.4%. The company affirmed its full-year outlook. The stock has slipped 1.0% year to date through Wednesday, while the S&P 500 SPX, -1.02% has dropped 20.6%