Conagra Brands Inc (NYSE:CAG) posts mixed result

Conagra Brands Inc (NYSE:CAG) stock rose 1.48% (As on July 15, 11:48:09 AM UTC-4, Source: Google Finance) after the company posted mixed result for the fourth quarter of FY 22. The increase in organic net sales was driven by a 13.2% improvement in price/mix, which was partially offset by a 6.4% decrease in volume. Price/mix was driven by the Company’s inflation-driven pricing actions that were reflected in the marketplace throughout the quarter and favorable brand mix. The volume decrease was primarily a result of the elasticity impact from inflation-driven pricing actions. Adjusted net income attributable to Conagra Brands increased 20.6% to $314 million in the quarter, driven primarily by an increase in operating profit and a strong performance from the Company’s Ardent Mills joint venture. Adjusted EBITDA, which includes equity method investment earnings and pension and postretirement non-service income, increased 13.5% to $591 million in the quarter.

CAG in the fourth quarter of FY 22 has reported the adjusted earnings per share of 65 cents, beating the analysts’ estimates for the adjusted earnings per share of 63 cents. The company had reported the adjusted revenue growth of 6.2 percent to $2.91 billion in the fourth quarter of FY 22, missing the analysts’ estimates for revenue of $2.93 billion. The increase in net sales primarily is due to a 0.5% decrease from the sale of the Egg Beaters business (the Sold Business); a 0.1% decrease from the impact of foreign exchange and a 6.8% increase in organic net sales.

Moreover, the company’s reported and organic net sales for the Grocery & Snacks segment increased 7.2% to $1.2 billion in the quarter. In the quarter, price/mix increased 14.4% and volume decreased 7.2%. Price/mix was primarily driven by favorability in inflation-driven pricing coupled with favorable brand mix. The volume decline was primarily due to the elasticity impact from inflation-driven pricing actions. In the quarter, the Company gained share in staples categories such as syrup and refried beans, and snacking categories including microwave popcorn and meat snacks. Net sales for the Refrigerated & Frozen segment increased 3.4% to $1.2 billion. Net sales for the Foodservice segment increased 21.5% to $287 million in the quarter. Net sales for the International segment increased 0.9% to $231 million.

Conagra expects FY23 organic net sales growth of 4% – 5%, Conagra expects FY23 adjusted EPS growth of 1% – 5% and CAG expects cost of goods sold inflation to continue into FY23.

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