Conagra Brands, Inc. (NYSE: NYSE:CAG) has expanded its snack offerings by acquiring Sweetwood Smoke & Co., the company behind FATTY Smoked Meat Sticks, a popular brand of protein-rich snacks.
The financial details of the transaction, announced Friday, remain undisclosed.
FATTY Smoked Meat Sticks are known for their high-quality pork and beef ingredients, smoked using real hickory wood, catering to consumers seeking convenient and health-conscious options.
Conagra's President and CEO Sean Connolly remarked that the addition of FATTY aligns with the company's strategic direction, focusing on the snacking and frozen categories and driving faster growth.
Ryan Wood, founder and CEO of Sweetwood Smoke & Co., expressed enthusiasm about the acquisition, citing the alignment of his brand's commitment to quality and Conagra's expansive reach. Wood, who is also a co-founder of Under Armour (NYSE:UA), highlighted that FATTY was created to offer high protein snacks for active lifestyles.
The acquisition is not expected to impact Conagra's previously issued FY25 guidance, as confirmed by the company. Conagra, with a diverse brand portfolio that includes Birds Eye, Duncan Hines, and Healthy Choice, among others, continues to adapt to changing consumer preferences.
FATTY Smoked Meat Sticks has gained recognition for its growth and brand strength, being named to the Bain & Company Insurgent Brand list in 2024, which spotlights rapidly growing brands in the United States.
This expansion by Conagra Brands is part of its ongoing strategy to innovate and evolve within the food industry, maintaining a focus on quality foods that resonate with modern consumers.
ConAgra Brands reported a year of steady progress for fiscal 2024, with gains in its frozen and snacks segments, and a robust improvement in free cash flow.
However, the company anticipates fiscal year 2025 to be transitional, projecting a range of -1.5% to flat growth for organic net sales and an adjusted EPS of $2.60 to $2.65.
Stifel has revised its organic sales estimate to reflect a decline of over 1%, primarily due to the anticipated pressure on price/mix, and has adjusted its EPS estimate for ConAgra to $2.61.
InvestingPro Insights
In light of Conagra Brands' recent acquisition of Sweetwood Smoke & Co., investors may be interested in the company's financial health and market performance. With a robust market capitalization of $14.52 billion, Conagra stands as a significant player in the food industry. The company's dedication to dividend growth is evident, as it has raised its dividend for 4 consecutive years, and remarkably, has maintained dividend payments for 49 consecutive years, signaling a strong commitment to shareholder returns.
InvestingPro Data shows that Conagra's Price/Earnings (P/E) ratio is currently at 41.92, which is relatively high, indicating that investors may be expecting higher earnings growth in the future. This expectation seems to be supported by the company's net income, which is anticipated to grow this year. Despite a slight decline in revenue growth over the last twelve months as of Q4 2024, the company's gross profit margin remains healthy at 27.82%, showcasing efficient cost management and strong pricing power.
For those looking to delve deeper into Conagra's financial metrics and prospects, there are additional InvestingPro Tips available on the platform, including insights into the company's valuation, which implies a strong free cash flow yield, and analyst predictions regarding profitability. For instance, while 10 analysts have revised their earnings estimates downwards for the upcoming period, others maintain a positive outlook, predicting that the company will remain profitable this year. These varied perspectives highlight the importance of comprehensive analysis when considering investment decisions.
To explore further details and gain more InvestingPro Tips on Conagra Brands, interested individuals can visit InvestingPro, which offers a wealth of additional insights and data points to inform investment strategies.
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