Conagra Brands Inc (NYSE:CAG) stock rose 1.16% (As on December 20, 11:18:48 AM UTC-4, Source: Google Finance) after the company reported second-quarter fiscal 2025 results that exceeded analyst expectations for both earnings and revenue but lowered its full-year earnings guidance. The business returned to growth in the second quarter despite a continued challenging consumer environment as the investments paid off, driving strong market share performance. While momentum remains strong, the company expects the business to be impacted by two headwinds in the back half, including higher than expected inflation and unfavorable foreign exchange rates, leading the company to update the fiscal 2025 outlook. Further, the company’s Grocery&Snacks segment saw a 2.0% increase in net sales to $1.3 billion, while the Refrigerated&Frozen segment remained flat at $1.3 billion. The International segment experienced a 12.9% decrease in net sales to $243 million.

CAG in the second quarter of FY 25 has reported the adjusted earnings per share of 70 cents, beating the analysts’ estimates for the adjusted earnings per share of 68 cents. The company had reported the adjusted revenue decline of 0.4 percent to $3.2 billion in the second quarter of FY 25, beating the analysts’ estimates for revenue of $3.15 billion. The 0.3% increase in organic net sales was driven by a 0.1% negative impact from price/mix and a 0.4% increase in volume. Gross profit was flat at $847 million in the quarter and adjusted gross profit decreased 2.3% to $842 million as productivity and higher organic net sales were offset by the negative impacts of cost of goods sold inflation and unfavorable operating leverage. Gross margin increased 11 basis points to 26.5% in the quarter, and adjusted gross margin decreased 52 basis points to 26.4%. Adjusted net income attributable to Conagra Brands decreased 1.3% to $337 million, primarily as a result of the decrease in gross profit and increase in SG&A. Adjusted EBITDA, which includes equity method investment earnings and pension and postretirement non-service expense (income), decreased 3.3% to $639 million in the quarter, primarily driven by the decrease in adjusted operating profit.

ConAgra updated its fiscal 2025 outlook, now projecting adjusted earnings per share between $2.45 and $2.50, below the analyst consensus of $2.58 and lower than its prior target of between $2.60 and $2.65. The company expects organic net sales near the midpoint of a range between -1.5% to flat compared to fiscal 2024.