CONAGRA BRANDS REPORTS 1ST QUARTER RESULTS.

CHICAGO: Today Conagra Brands, Inc. (NYSE: CAG) reported results for the first quarter of fiscal year 2024, which ended on August 27, 2023. All comparisons are against the prior-year fiscal period, unless otherwise noted.

Highlights

First quarter net sales were flat to the prior year; organic net sales decreased 0.3%

Operating margin in the quarter was 16.8% representing a 1,757 basis point increase over the prior year quarter. Adjusted operating margin was 16.7% representing a 297 basis point increase over the prior year quarter

Diluted earnings per share (EPS) for the first quarter was $0.67 compared to a diluted loss per share of $0.16 in the prior year quarter. Adjusted EPS was $0.66, representing a 15.8% increase over the prior year quarter

The company is reaffirming its fiscal 2024 guidance reflecting:

Organic net sales growth of approximately 1.0% compared to fiscal 2023

Adjusted operating margin between 16.0% and 16.5%

Adjusted EPS between $2.70 and $2.75

CEO Perspective

Sean Connolly, president and chief executive officer of Conagra Brands, commented, "I am proud of our team for delivering another quarter of strong margin recovery and EPS growth despite facing industry-wide macro dynamics that have affected consumer purchasing behavior and elongated the volume recovery period. We will continue to focus on executing our Conagra Way playbook as we make targeted and disciplined investments throughout the remainder of the year to drive the top-line. We are reaffirming our guidance for fiscal 2024, reflecting confidence in our plans, people and agility as we continue to navigate a shifting consumer environment."

Total Company First Quarter Results

In the quarter, net sales were $2.9 billion reflecting:

a 0.3% increase from the favorable impact of foreign exchange; and

a 0.3% decrease in organic net sales.

The 0.3% decrease in organic net sales was driven by a 6.6% decrease in volume largely due to industry-wide slowdown in consumption and recent consumer behavior shifts, partially offset by a 6.3% improvement in price/mix.

Gross profit increased 14.3% to $823 million in the quarter, and adjusted gross profit increased 10.9% to $801 million. First quarter gross profit increased primarily as a result of inflation-driven pricing that was implemented in fiscal 2023 and productivity, which more than offset the negative impacts of cost of goods sold inflation, unfavorable operating leverage, and lower organic net sales. Gross margin increased...