Conagra Brands Inc beat Wall Street estimates for quarterly profit on Thursday, boosted by last year's purchase of Pinnacle Foods and strong demand for the packaged food maker's frozen food brands.
Pinnacle is the biggest of a handful of acquisitions the Chicago-based firm has made over the past three years to beef up its product portfolio with brands including Birds Eye and meatless brand Gardein.
New Product Lines
Investors were initially uncertain about the success of the deal last year, but as the company works to integrate the new product lines, shares in Conagra have risen about 40%.
Including Pinnacle, net sales in its refrigerated and frozen foods 51% higher to $959 million (€875.54 million), while organic net sales in the segment rose 1.5% in the quarter.
Excluding certain items, the company earned 43 cents per share, beating the average analyst of 39 cents per share, according to IBES data from Refinitiv.
However, the company, which reaffirmed its full-year sales forecast, saw organic sales fall in its foodservice segment in the quarter.
"While our Foodservice and International businesses experienced unplanned softness on the top line this quarter, they outperformed our operating profit and margin expectations," Sean Connolly, the chief executive officer of Conagra said in a statement.
"We believe the first quarter net sales issues in these segments were discrete and are now largely behind us."
Overall, net sales rose to $2.39 billion (€2.18 billion) from $1.83 billion (€1.67 billion), but missed the average analysts estimate of $2.48 billion (€2.26 billion).