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CAG $33.80 - Conagra Brands Reports First Quarter Results

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Highlights



First quarter net sales increased 9.5%; organic net sales increased 9.7%

Operating margin in the quarter was (0.7%); adjusted operating margin was 13.7%

Diluted loss per share for the first quarter was $0.16, and adjusted earnings per share (EPS) was $0.57

First quarter operating margin, net income, and diluted EPS were impacted by non-cash goodwill and intangible asset impairment charges, primarily driven by an increased discount rate

The company is reaffirming its fiscal 2023 guidance reflecting:

CEO Perspective

Sean Connolly, president and chief executive officer of Conagra Brands, commented, "The strength of our brands and continued execution of the Conagra Way playbook resulted in strong sales and adjusted operating profit during the first quarter. We continued to deliver improved service and productivity as we navigate ongoing inflationary pressures and industry-wide supply chain challenges. Our strong start to fiscal 2023 reaffirms our confidence in our outlook for the balance of the fiscal year as we remain focused on generating value for our shareholders."

Total Company First Quarter Results

In the quarter, net sales increased 9.5% to $2.9 billion. The increase in net sales primarily reflects:

a 0.2% decrease from the unfavorable impact of foreign exchange; and

a 9.7% increase in organic net sales.

The 9.7% increase in organic net sales was driven by a 14.3% improvement in price/mix, which was partially offset by a 4.6% decrease in volume. Price/mix was driven by the company's inflation-driven pricing actions that were reflected in the marketplace throughout the quarter. The volume decrease was primarily a result of the elasticity impact from inflation-driven pricing actions; however, the elasticity impact was favorable to expectations.