Conagra stock falls after the company names new CEO

Conagra Brands (CAG) CEO Sean Connolly is stepping down connected June 1 aft 11 years starring the company.

John Brase volition beryllium the adjacent CEO of the snack and repast giant, known for snacks similar Slim Jim and Reddi-wip. He is presently COO astatine J.M. Smucker (SJM). Prior to that, helium spent 30 years astatine Procter & Gamble (PG).

"The determination to name John arsenic Conagra's adjacent person follows our thoughtful attack to succession planning, including discussions with Sean, and our determination that present is the close clip for this enactment transition," Richard Lenny, the autarkic seat of Conagra's committee of directors, said successful the release.

The news, however, seemed to instrumentality investors by surprise. Conagra banal fell much than 5% successful aboriginal day trading.

"We judge that Mr. Brase is good regarded by investors ... But helium besides joins a institution facing wide challenges," JPMorgan expert Thomas Palmer wrote successful a enactment to clients.

Conagra banal has fallen 45% implicit the past twelvemonth arsenic the user packaged goods manufacture faces user pushback implicit higher prices.

"We've dealt with the astir protracted ostentation ace rhythm that I've surely seen successful my 35 years of doing this," Connolly said connected the company's astir caller net telephone earlier this month. Conagra had lowered prices connected immoderate of its frozen foods and snacks, but it precocious raised prices connected canned foods and products with cocoa owed to higher costs.

The institution reported net per stock of $1.70 connected April 1, which were adjacent to expectations of $1.69 per share, according to Bloomberg estimates.

However, determination are "mounting net pressures to consider," Palmer wrote, including "inflation, particularly freight and packaging, which could bounds the magnitude of CAG's net betterment adjacent year."

Connolly antecedently said the squad needs to beryllium "agile." While the institution contracts retired freight costs, helium said it has "less coverage" for diesel fuel, which is presently astatine elevated prices owed to the warfare successful Iran.

According to AAA, diesel substance is present $5.65 per gallon, conscionable beneath the grounds precocious of $5.82 successful June 2022.

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Lackluster measurement maturation is different cardinal absorption for analysts. Volume grew conscionable 0.5% successful the 3rd quarter.

"If ostentation is benign, you'll spot america apt proceed to absorption connected continued measurement momentum," Connolly said. "If for immoderate reason, ostentation was to spell the different way, we'll support our options open. After all, we are a institution that is intensely focused connected maximizing currency travel and we've already proven that we tin determination the measurement needle to maturation successful frozen and snacks erstwhile we request to."