On Friday, Conagra Brands, Inc. (NYSE:CAG) announced the acquisition of Sweetwood Smoke & Co., the company behind FATTY Smoked Meat Sticks.
The purchase enhances Conagra's portfolio with a premium brand that aligns with its strategic focus on better-for-you snacks and frozen foods. While the financial details of the deal remain undisclosed, the move is expected to contribute to Conagra's trajectory toward faster growth.
FATTY Smoked Meat Sticks are known for their high protein content and appeal to consumers seeking convenient, health-conscious snack options. They are crafted with quality pork and beef, smoked with authentic hickory wood. This acquisition is seen as a complementary addition to Conagra's existing snack offerings, which are part of a category the company has been actively expanding.
Sean Connolly, president and chief executive officer of Conagra Brands, emphasized the significance of the acquisition. "The acquisition of FATTY Smoked Meat Sticks is another step in reshaping our portfolio for faster growth," he stated. Connolly also noted that incorporating FATTY into Conagra's lineup supports the company's strategic emphasis on the snacking and frozen categories, sectors that have seen increasing consumer demand.
Ryan Wood, founder and chief executive officer of Sweetwood Smoke & Co., expressed enthusiasm about the acquisition, citing his own background as an athlete and adventure enthusiast as inspiration for creating FATTY. "I'm looking forward to working with Conagra to make FATTY products available to more people with big appetites for meat sticks," Wood said.
Conagra also confirmed that its financial outlook for FY25, as previously issued on July 11, 2024, remains unchanged in light of this transaction. This indicates that the company had already accounted for the strategic benefits of such an acquisition in its future guidance.
In other recent news, Conagra Brands has reported steady progress in fiscal year 2024, with gains in its frozen and snacks segments and a robust improvement in free cash flow. 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. Analysts at Stifel and RBC Capital have adjusted their estimates and price targets for Conagra, reflecting these developments and the company's latest financial outlook.
Moreover, Conagra has added FATTY Smoked Meat Sticks, a product of Sweetwood Smoke & Co., to its portfolio. This move aligns with Conagra's strategic focus on the snacking and frozen categories. The acquisition is not expected to impact Conagra's previously issued FY25 guidance.
InvestingPro Insights
The recent acquisition by Conagra Brands, Inc. (NYSE:CAG) underscores its commitment to expanding its portfolio in the better-for-you snacks and frozen foods sector. In line with this strategic move, InvestingPro data reveals that Conagra has a robust market capitalization of $14.52 billion, highlighting its significant presence in the industry. Despite a slight revenue decrease in the last twelve months as of Q4 2024, Conagra's gross profit margin remains strong at 27.82%, indicating efficient cost management relative to sales.
InvestingPro Tips suggest that Conagra's dedication to shareholder returns is evident, with a high shareholder yield and a consistent history of dividend payments for 49 consecutive years, including a 6.06% dividend growth in the last twelve months as of Q4 2024. These financial commitments to shareholders reflect a stable and investor-friendly approach, which may be attractive to those looking for reliable income streams through dividends. Additionally, analysts predict that Conagra will remain profitable this year, which could provide further confidence in the company's financial health post-acquisition.
For investors seeking more in-depth analysis and additional tips, there are 9 more InvestingPro Tips available, which can be explored at https://www.investing.com/pro/CAG. These tips could offer valuable insights into Conagra's performance and potential investment opportunities following its strategic acquisition of Sweetwood Smoke & Co.
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