Conagra Brands Inc raised its financial expectations for 2020 as consumers swarm stores to pick shelves clean of food items and essentials because of the lockdowns imposed across the country to stop the spread of the coronavirus.
Cases related to the virus have soared in the United States in the past few weeks to over 163,000, forcing consumers to work from home and avoid social gatherings.
To prepare for the situation, consumers lined up at supermarkets to stock pantries with essentials, frozen foods and snacks.
Conagra and other packaged food makers manufactured more of the products in demand and even paid one-time bonuses to its employees as they hurried to stock supermarkets shelves.
'Significantly Elevated Demand'
"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," chief executive officer Sean Connolly said in a statement.
The company said that on a quarter-to-date basis, shipments and consumption in domestic retail business have increased about 50%, which has more than offset the impact of worsening trends in its foodservice business.
Conagra said fiscal 2020 organic net sales and earnings would be above the high end of its previous range.
Last month, the company had lowered the forecast and said it expects organic sales growth at between flat and 0.5% and earnings between $2 and $2.07 per share, citing weak consumption trends.
Third-Quarter Results
For the third quarter, net sales fell 5.6% to $2.56 billion (€2.34 billion), mainly due to softer-than-expected demand for snacks and products it supplied to restaurants due to the cold winter.
Analysts on average had expected $2.58 billion (€2.35 billion), according to IBES data from Refinitiv.
Net earnings attributable to the company fell to $204.4 million (€186.49 million), or 42 cents per share, in the quarter ended 23 February, from $242 million (€220.79 million), or 50 cents per share, a year earlier.
Excluding one-time items, the company earned 47 cents, 2 cents lower than expectations.
