CHICAGO, February 17, 2020 — Conagra Brands, Inc. (NYSE:CAG) today announced that it is revising its fiscal 2020 outlook as a result of softer than expected category performance during the company’s fiscal third quarter, which ends on February 23, 2020. Third quarter consumption declines have impacted a wide range of categories across the food industry, including categories in which Conagra Brands competes.
The Company now expects fiscal 2020 organic net sales growth to be flat to 0.5%. Adjusted operating margin is now expected to be 15.8% to 16.2%. The Company expects adjusted diluted earnings per share from continuing operations of $2.00 to $2.07.
Sean Connolly, president and chief executive officer of Conagra Brands, commented, “Consumption softness in the quarter first emerged in the foodservice industry, with holiday restaurant traffic weaker than last year. Softness pivoted to retail in January and impacted numerous categories across food, including several in which we compete. While we planned for tougher year-over-year comparable results in the third quarter, we did not plan for this level of category softness. Accordingly, we are updating our fiscal 2020 outlook.”
Connolly continued, “Despite the unplanned third quarter consumption downturn, we remain encouraged by the health of our brands and the traction we have made on our fiscal 2020 innovation slate. We have gained share in many of our categories during the quarter and, based on our analysis, believe the recent consumption weakness is abating. We expect a resumption of year-over-year organic net sales growth in our fourth fiscal quarter.”
The Company remains committed to achieving its fiscal 2021 leverage goal. In addition, it is also committed to delivering on its fiscal 2022 targets, which have been updated for recent divestitures.
Connolly noted, “We remain confident in our brands, the proven Conagra Way playbook and the long runway of growth ahead. As such, we are reaffirming our commitment to achieving our fiscal 2021 deleveraging and delivering on our long-term fiscal 2022 targets.”
The Company’s CAGNY presentation slides will be available today, February 17, at approximately 10:00 a.m. ET on conagrabrands.com/investor-relations under Events & Presentations.