(Reuters) – Conagra Brands Inc (CAG.N) raised its financial expectations for 2020 on Tuesday as consumers swarm stores to pick shelves clean of food items and essentials due to the lockdowns imposed across the United States to stop the spread of the coronavirus.
Cases related to the virus have soared in the country in the past few weeks to over 163,000, forcing consumers to work from home and avoid social gatherings.
To prepare for the situation, consumers lined up at supermarkets to stock their pantries with everyday essentials, frozen foods and snacks, leading to shortages at many supermarkets.
Conagra and other packaged food makers manufactured more of the products in demand and even paid one-time bonuses to its employees as they hurried to restock supermarkets shelves.
“Typically, we would be spending our time on this call reaffirming our guidance … But this year is unprecedented, and the impact of COVID-19 will be significant,” Chief Executive Officer Sean Connolly told analysts on a post-earnings conference call.
Shares of the company were up 7% at $30.22. They have fallen 13% this year.
Last month, the company had lowered its forecast for fiscal 2020, citing weak consumption trends especially in its foodservice category.
“People are eating much more at home and not away from home, products like ours are getting levels of trial that were not anticipated … that could turn into consistent users over time,” Connolly said.
On a quarter-to-date basis, shipments and consumption in domestic retail business, which is about 80% of total company sales, increased about 50%, he said.
Conagra now expects 2020 organic net sales growth to be above the high-end of its previous forecast range of flat to 0.5%. The company now also estimates earnings to come in above the top-end of its outlook range of between $2 and $2.07 per share.
For the third quarter, Conagra’s net sales fell 5.6% to $2.56 billion, mainly due to softer-than-expected demand for products it supplied to restaurants due to the cold winter.
Analysts on average had expected $2.58 billion, according to IBES data from Refinitiv.
Net earnings attributable to the company fell 15.5% to $204.4 million. Excluding one-time items, the company earned 47 cents, 2 cents lower than expectations.
Reporting by Nivedita Balu in Bengaluru; Editing by Maju Samuel