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Conagra Brands Releases Q1 FY 2023 Financial Results

 10/06/2022

In an October 6th 2022 release, Conagra Brands (CAG) released financial results for the first quarter of Fiscal 2023 ending August 28th. The Company can be regarded as representative of the manufacturing and packaged food sector with competitors including Post Holdings and Kraft-Heinz all currently under pressure to reduce prices to the major retail and supermarket chains. In an inflationary environment consumers are turning to less expensive private brands but eat-at-home will benefit Conagra Brands.

 

For the first quarter of 2023, net loss was $77.5 million on total revenue of $2,904 million with a diluted EPS of $(0.16).  Comparable figures for the 1st quarter of Fiscal 2023 ending August 29th 2021 were net income of $235.7 million on total revenue of $2,653 million with an EPS of $0.49.

 

The release included results for the four operating segments:-

  • Foodservice: Operating profit of $1 million on revenue of $275 million
  • Refrigerated and Frozen: Operating loss of $216 million on revenue of $1,207 million
  • International: Operating profit of $27 million on revenue of $234 million
  • Groceries and Snacks: Operating profit of $250 million on revenue of $1,188 million

 

For the first quarter of FY 2023 (with the comparable values for the corresponding quarter of FY 2022 in parentheses) Conagra achieved a gross margin of 24.8 percent (25.4); operating margin of -4.1 percent (10.1), mainly due to a $412 charge for asset impairment relating to brands. Sales increased by 9.5 percent.

 

Guidance for FY 2023 included net sales growth of 4 to 5 percent; Adjusted operating margin increase of 15 percent   and EPS growth of between 1 and 5 percent.

 

Conagra Brands listed assets of $22,220 million, including $14,776 million goodwill and intangibles, against long-term debt and other obligations of $9,480 million. The Company had an intraday market capitalization of $15,820 million on October 6th. CAG trades with a forward P/E of 13.6 and has ranged over a 52-week period from $30.06 to $36.97 with a 50-day moving average of $34.31.