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Conagra stock rises on earnings beat

Yahoo Finance Live anchors discuss first-quarter earnings for Conagra.

Video transcript

[AUDIO LOGO]

JULIE HYMAN: Now, let's talk about what's going on with Conagra. That company reported earnings that topped estimates. It beat expectations on both the top and bottom lines. First-quarter net sales up about 9 and 1/2%. And the company re-affirmed its guidance for the full year. Now, says it expects net sales growth still of 4% to 5%.

So interesting here what we're seeing from some of the food companies when it comes to them managing through this period here. It looks like the adjusted operating margin was very slightly low of estimates-- behind estimates. So that's something to continue to watch.

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BRIAN SOZZI: Yeah, my hieroglyphic writing here that I have on my tablet here, you know, I wrote down this. And I'll loop in McCormick as well. I know we're focused on Conagra, but both of them are out earnings this morning.

Conagra reaffirmed their outlook. McCormick reaffirmed their outlook. I would say, Constellation Brands also reaffirmed their outlook. And to me, I think this might be the first sign of, we are moving beyond the peak of inflation.

And you take that, coupled with the pricing that some of these companies, like Conagra, McCormick, and Constellation Brands push through in the most recent quarter, look, these stocks might come alive again. You know, less inflationary impact, price increases seemingly sticking. That's a pretty good setup for some of these names.

BRAD SMITH: I think if anything though, too-- I guess, I'll take the counter side of that-- as you're pushing through some of that pricing, especially on necessity items that consumers are purchasing, I'm not gonna sit home and eat some dry chicken. Of course, I'm still gonna get the condiments from a McCormick or Conagra out there.

And so for these brands that are definitely dealing with the necessities segment of that household spending, even if you see more of that household spending start to be put on credit cards, that's still going to lean towards some of the brands like a Conogra-- like a Conagra, excuse me, like a McCormick. That's gonna at least add some seasonality on a consistent basis to the foods that you're eating.

And I think when you do point out one of the-- one of the good things about what we saw in this most recent quarter, their gross profit also increased by about 7% in the first quarter. But again, how much of that directly correlated to the price increases that they're also pushing through at the same time?