In an October 5th 2023 SEC Form Q-10 filing, Conagra Brands (CAG) released financial results for the first quarter of Fiscal 2023 ending August 27th. The Company can be regarded as representative of the manufacturing and packaged food sector with competitors including Post Holdings, Campbell Soup Company 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 first quarter of FY 2024, net income was $319.7 million on net revenue of $2,904 million with a diluted EPS of $0.67. Comparable figures for the first quarter of FY 2023 ending August 28th 2022 were a net loss of $(77.5) million on net revenue of $2,904 million with a diluted negative EPS of $(0.16).
The release included results for the four operating segments:-
- Foodservice: Operating profit of $44 million on revenue of $289 million
- Refrigerated and Frozen: Operating profit of $199 million on revenue of approximately $1,200 million
- International: Operating profit of $24 million on revenue of $260 million
- Groceries and Snacks: Operating profit of $259 million on approximate revenue of $1,200 million
For the first quarter of FY 2024 (with the values for the corresponding quarter of FY 2023 in parentheses) Conagra achieved a gross margin of 28.3 percent (24.8%) and an operating margin of 16.9 percent (-0.8%). Revenue was unchanged.
Sean Connolly CEO stated "We are reaffirming our fiscal 2024 EPS guidance reflecting our plans, people and agility as we continue to navigate a shifting consumer environment”.
Guidance for FY 2024 included net sales growth of 10.0 percent; an adjusted increase in operating margin of 16.0 percent and an EPS of between $2.70 and $2.75.
Conagra Brands listed assets of $22,365 million, including $14,370 million goodwill and intangibles, against long-term debt and other obligations of $9,470 million. The Company had an intraday market capitalization of $13,190 million on October 10th. CAG trades with a forward P/E of 10.1 and has ranged over a 52-week period from $25.16 to $41.30 with a 50-day moving average of $29.47. Twelve-month trailing operating and profit margins were 16.3 percent and 8.5 percent respectively. The Company generated a twelve-month trailing return of 5.6 percent on assets and 12.3 percent on equity.