In a January 4th 2023 SEC Form Q-10 filing, Conagra Brands (CAG) released financial results for the second quarter of Fiscal 2024 ending November 26th.2023. 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 may benefit Conagra Brands and competitors.
For the second quarter of FY 2024, net income was $286.2 million on net revenue of $3,208 million with a diluted EPS of $0.60. Comparable figures for the second quarter of FY 2023 ending November 27th 2022 were net income of $311.9 million on net revenue of $3,313 million with a diluted EPS of $0.80
The release included results for the four operating segments:-
- Foodservice: Operating profit of $38 million down 12 percent from Q2 2023, on revenue of $295 million
- Refrigerated and Frozen: Operating profit of $220 million, down 12 percent, on revenue of approximately $1,339 million
- International: Operating profit of $6 million, down 84 percent on revenue of $280 million
- Groceries and Snacks: Operating profit of $279 million, down 11 percent on revenue of $1,295 million
For th
e second quarter of FY 2024 (with the values for the corresponding quarter of FY 2023 in parentheses) Conagra achieved a gross margin of 26.3 percent (27.8) and an operating margin of 13.9 percent (13.6). Revenue was down 3.2 percent.
Guidance for FY 2024 was downgraded, including net sales growth of 1 to 2 percent; an adjusted increase in operating margin of 15.6 percent and an EPS of between $2.60 and $2.65.
Conagra Brands listed assets of $22,120 million, including a disproportionate $14,274 million as goodwill and intangibles, against long-term debt and other obligations of $9,211 million. The Company had an intraday market capitalization of $13,990 million on January 4th. CAG trades with a forward P/E of 11.0 and has ranged over a 52-week period from $25.16 to $41.30 with a 50-day moving average of $28.37. Twelve-month trailing operating and profit margins were 17.7 percent and 8.8 percent respectively. The Company generated a twelve-month trailing return of 5.6 percent on assets and 12.3 percent on equity.