The classic line of canned pasta products saw a 4.5% gain in dollar sales during the last five weeks of the holding company’s February quarter, thanks to Conagra’s efforts to boost the business.
The growth trend also kept its shape during the first week of Conagra’s current quarter, which preceded the mass business shutdowns across the country triggered by the fast-spreading COVID-19 disease.
“Chef Boyardee was growing nicely before COVID. It’s doing very well now,” Connolly said in a “Mad Money” interview. “People are having flashbacks to their childhood … and hopefully they’re having a good eating experience.”
Conagra reported fiscal 2020 third quarter earnings of 47 cents per share on about $2.56 billion in revenue. That missed Factset estimates of 53 cents and $2.66 billion, respectively.
The quarter ended as the market was sinking a bear market and the federal and state governments began ordering business restrictions in efforts to slow the spread of the virus.
School and business closures on top of stay-at-home mandates has pushed consumers out of restaurants and into grocery stores to stock up their pantries with food and other items to weather the health crisis.
Connolly added that there has been an uptick in sales across its portfolio of products have in response.
“We’re selling everything we can make. Times like these call for extraordinary resiliency,” he said. “We’re running flat out to keep our food coming and I’m incredibly proud of our team as they navigate these challenging times.”
The company markets a host of food products including Slim Jim, Healthy Choice, Hunt’s and Orville Redenbacher’s among other names.
During hard times, canned goods are typically the first to go, followed by frozen foods, Connolly explained.
“When you see a crisis like this, the way it unfolds, Jim, is you tend to see canned goods move first,” he said. “But very quickly after that we saw a shift to frozen and the frozen portfolio that we have … has really, really matched the center store grocery business in terms of growth rates and more recently we’ve seen it move over to our snacks business as well, which is growing every bit as fast as the rest.”
Shares of Conagra rose 4% during Tuesday’s session. The consumer staples stock is down more than 14% this year, slightly better than the 20% decline in the S&P 500.