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Conagra Brands Releases Q3 FY 2023 Financial Results

 04/09/2023

In an April 5th 2023 SEC Form Q-10 filing, Conagra Brands (CAG) released financial results for the third quarter of Fiscal 2023 ending February 26th. 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 although the trend to eat-at-home will benefit Conagra Brands.

 

For the third quarter of 2023, net income was $341.7 million on total revenue of $3,087 million with a diluted EPS of $0.71.  Comparable figures for the third quarter of Fiscal 2022 ending February 27th 2022 were net income of $218.4 million on total revenue of $2,014 million with a diluted EPS of $0.45.

 

The release included results for the four operating segments:-

  • Foodservice: Operating profit of $24 million on revenue of $275 million
  • Refrigerated and Frozen: Operating profit of $263 million on revenue of $1,308 million
  • International: Operating profit of $37 million on revenue of $260 million
  • Groceries and Snacks: Operating profit of $256 million on revenue of $1,244 million

 

For the third quarter of FY 2023 (with the comparable values for the corresponding quarter of FY 2022 in parentheses) Conagra achieved a gross margin of 27.1 percent (23.4%) and an operating margin of 15.9 percent (12.3%). Sales increased by 9.5 percent.

 

Sean Connolly CEO stated "We are raising our fiscal 2023 EPS guidance and narrowing our ranges for organic net sales growth and adjusted operating margin.”

 

Guidance for FY 2023 included net sales growth of 7.0 to 7.5 percent; An adjusted operating margin increase of 15.5 percent  and EPS growth of between 14 and 17 percent.

 

Conagra Brands listed assets of $22,454 million, including $14,743 million goodwill and intangibles, against long-term debt and other obligations of $9,954 million. The Company had an intraday market capitalization of $18,290 million on April 7th. CAG trades with a forward P/E of 13.5 and has ranged over a 52-week period from $31.02 to $41.30 with a 50-day moving average of $36.45.