In a July 11th 2024 release, Conagra Brands (CAG) posted financial results for Fiscal 2024 ending May 26th 2024. 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 food service providers and supermarket chains. Despite moderate inflation consumers are turning to less expensive private brands although the trend to eat-at-home may benefit Conagra marketing frozen dinners.
For FY 2024, net income was $347 million on net sales of $12,052 million with a diluted EPS of $0.72. Comparable figures for FY 2023 were net income of $684 million on net revenue of $12,277 million with a diluted EPS of $1.42
The release included results for the four operating segments:-
- Foodservice: Operating profit of $157 million up 84 percent from FY 2023, on revenue of $1,148 million
- Refrigerated and Frozen: Operating loss of $93 million, down 136 percent, on revenue of $4,866 million
- International: Operating profit of $98 million, down 19 percent on revenue of $1,078 million
- Groceries and Snacks: Operating profit of $1,012 million, up 1.0 percent on revenue of $4,958 million
For FY 2024 (with the values for corresponding FY 2023 in parentheses) Conagra achieved a gross margin of 27.6 percent (26.6) and an operating margin of 7.1 percent (8.8). Revenue was down 1.8 percent.
In commenting on FY 2024 results Sean Connolly, president and CEO stated, "Our investments in our brands continued to yield results, and again drove volume improvement in our Domestic Retail business. Progress was most notable in our key Frozen and Snacks domains, where we also saw market share gains. Additionally, our supply chain productivity initiatives enabled us to expand adjusted gross margins, and we continued to strengthen the balance sheet and reduce our net leverage ratio. Looking ahead, we expect a gradual waning of the challenging industry trends seen throughout fiscal year 2024, as consumers adapt and establish new reference prices. We will continue to invest wisely to support our brands”
Guidance for FY 2025 included net sales flat to a decline of 1.5 percent; an adjusted increase in operating margin of 15.0 to 15.8 percent and an EPS of $2.67
Conagra Brands listed assets of $20,862 million, including a disproportionate $13,290 million as goodwill and intangibles, against long-term debt and other obligations of $9,107 million. The Company had an intraday market capitalization of $13,760 million on July 15th. CAG trades with a forward P/E of 10.4 and has ranged over a 52-week period from $25.16 to $33.56 with a 50-day moving average of $29.56. Twelve-month trailing operating and profit margins were 17.9 percent and 2.9 percent respectively. The Company generated a twelve-month trailing return of 5.7 percent on assets and 4.0 percent on equity.