Investing.com – ConAgra soared on Wednesday after the food company reaffirmed its full-year guidance and said maintaining its dividend is a “top priority.”
ConAgra Foods (NYSE:), maker of food brands including Birds Eye, Reddi-wip and Slim Jim, maintained its guidance for earnings of between $2.03 and $2.08 per share and a net sales gain of 1%, sending its share price up 6.2%.
Like most food companies, ConAgra is grappling with rising ingredient costs and its efforts to pass them on to shoppers have been thwarted by intense competition.
Most of the ConAgra’s sales growth has been driven by acquisitions, so the company has focused squeezing out that little bit of extra growth by addressing executional challenges at some of its acquired businesses.
And its efforts are seemingly starting to take shape as the food company on Wednesday increased its value capture from synergies estimate to $285 million from $215 million.
Beyond the impact of rising costs, the integration of Pinnacle Foods, acquired in 2018, has weighed on overall gross margins, strangling cash flows, adding to worries that ConAgra’s dividend is vulnerable to a cut.
But the food company vowed to slash debt as it seeks maintain its current dividend, which it said was a “top priority.”
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