Conagra Brands Reports First Quarter Results
Conagra Brands (NYSE: CAG) reported Q1 FY2025 results with net sales decreasing 3.8% to $2.8 billion and organic net sales declining 3.5%. The company's reported operating margin fell 247 basis points to 14.4%, while adjusted EPS decreased 19.7% to $0.53. Despite challenges, Conagra reaffirmed its fiscal 2025 guidance, projecting organic net sales between -1.5% to flat and adjusted EPS between $2.60 and $2.65.
Key factors affecting Q1 performance included:
- Negative price/mix impact of 1.9%
- Volume decrease of 1.6%
- $27 million impact from temporary manufacturing disruptions in Hebrew National
- Gross profit decrease of 10.2% to $739 million
- SG&A increase of 1.1% to $338 million
The company maintained its market share in several categories and continued its portfolio reshaping initiatives.
Conagra Brands (NYSE: CAG) ha riportato i risultati del primo trimestre dell'anno fiscale 2025, con le vendite nette che sono diminuite del 3,8% a 2,8 miliardi di dollari e le vendite nette organiche in calo del 3,5%. Il margine operativo riportato è sceso di 247 punti base al 14,4%, mentre l'EPS rettificato è diminuito del 19,7% a 0,53 dollari. Nonostante le difficoltà, Conagra ha ribadito le previsioni per l'anno fiscale 2025, prevedendo vendite nette organiche tra -1,5% e stabile e EPS rettificato tra 2,60 e 2,65 dollari.
I fattori chiave che hanno influenzato la performance del Q1 includono:
- Impatto negativo di prezzo/mix dell'1,9%
- Riduzione del volume dell'1,6%
- Impatto di 27 milioni di dollari a causa di interruzioni temporanee nella produzione in Hebrew National
- Diminuzione dell'utile lordo del 10,2% a 739 milioni di dollari
- Aumento delle spese SG&A dell'1,1% a 338 milioni di dollari
La società ha mantenuto la sua quota di mercato in diverse categorie e ha proseguito le sue iniziative di rimodellamento del portafoglio.
Conagra Brands (NYSE: CAG) reportó los resultados del primer trimestre del año fiscal 2025, con una disminución del 3.8% en las ventas netas a 2.8 mil millones de dólares y una caída del 3.5% en las ventas netas orgánicas. El margen operativo reportado cayó 247 puntos básicos al 14.4%, mientras que el EPS ajustado disminuyó un 19.7% a 0.53 dólares. A pesar de los desafíos, Conagra reafirmó su guía fiscal para 2025, proyectando ventas netas orgánicas entre -1.5% y estables y EPS ajustados entre 2.60 y 2.65 dólares.
Los factores clave que afectaron el rendimiento del Q1 incluyeron:
- Impacto negativo de precio/mix del 1.9%
- Disminución del volumen del 1.6%
- Impacto de 27 millones de dólares por interrupciones temporales en la producción de Hebrew National
- Disminución del beneficio bruto del 10.2% a 739 millones de dólares
- Aumento de SG&A del 1.1% a 338 millones de dólares
La empresa mantuvo su participación en el mercado en varias categorías y continuó sus iniciativas de reestructuración de portafolio.
Conagra Brands (NYSE: CAG)는 2025 회계연도 1분기 결과를 보고했으며, 총 매출이 3.8% 감소하여 28억 달러에 이르고 유기적 순매출이 3.5% 감소했습니다. 보고된 운영 마진은 247BP 감소하여 14.4%로 감소했으며, 조정된 EPS는 19.7% 감소하여 0.53달러에 이릅니다. 어려움에도 불구하고 Conagra는 2025 회계연도 가이던스를 재확인하며 유기적 순매출이 -1.5%에서 보합으로 예상되며, 조정된 EPS는 2.60달러에서 2.65달러로 예상했습니다.
1분기 성과에 영향을 미친 주요 요인은 다음과 같습니다:
- -가격/혼합의 부정적 영향은 1.9%
- 1.6%의 물량 감소
- Hebrew National의 일시적인 제조 중단으로 인한 2700만 달러의 영향
- 총 이익이 10.2% 감소하여 7억 3900만 달러로 줄어듦
- SG&A가 1.1% 증가하여 3억 3800만 달러
회사는 여러 카테고리에서 시장 점유율을 유지했으며, 포트폴리오 재구성을 계속 진행하고 있습니다.
Conagra Brands (NYSE: CAG) a publié les résultats du premier trimestre de l'exercice fiscal 2025, avec une diminution de 3,8% des ventes nettes à 2,8 milliards de dollars et une baisse de 3,5% des ventes nettes organiques. La marge opérationnelle reportée a chuté de 247 points de base à 14,4%, tandis que l'EPS ajusté a diminué de 19,7% pour atteindre 0,53 dollar. Malgré les difficultés, Conagra a réaffirmé ses prévisions pour l'exercice 2025, projetant des ventes nettes organiques entre -1,5% et stables et un EPS ajusté compris entre 2,60 et 2,65 dollars.
Les facteurs clés ayant affecté la performance du Q1 incluent :
- Un impact négatif du prix/mélange de 1,9%
- Une diminution du volume de 1,6%
- Un impact de 27 millions de dollars en raison de perturbations temporaires de la production chez Hebrew National
- Une diminution du bénéfice brut de 10,2% à 739 millions de dollars
- Une augmentation des SG&A de 1,1% à 338 millions de dollars
L'entreprise a maintenu sa part de marché dans plusieurs catégories et a continué ses initiatives de restructuration de portefeuille.
Conagra Brands (NYSE: CAG) hat Ergebnisse für das 1. Quartal des Geschäftsjahres 2025 gemeldet, mit einem Rückgang des Nettoumsatzes um 3,8% auf 2,8 Milliarden Dollar und einem Rückgang des organischen Nettoumsatzes um 3,5%. Die gemeldete operative Marge fiel um 247 Basispunkte auf 14,4%, während der bereinigte EPS um 19,7% auf 0,53 Dollar zurückging. Trotz der Herausforderungen hat Conagra seine Prognosen für das Geschäftsjahr 2025 bekräftigt, mit einer Prognose für organischen Nettoumsatz zwischen -1,5% und stabil sowie bereinigtem EPS zwischen 2,60 und 2,65 Dollar.
Wichtige Faktoren, die die Leistung im 1. Quartal beeinflussten, waren:
- Negativer Preis/Mix-Einfluss von 1,9%
- Volumenrückgang von 1,6%
- Einfluss von 27 Millionen Dollar durch vorübergehende Störungen in der Produktion bei Hebrew National
- Rückgang des Bruttoergebnisses um 10,2% auf 739 Millionen Dollar
- SG&A-Anstieg um 1,1% auf 338 Millionen Dollar
Das Unternehmen hielt seinen Marktanteil in mehreren Kategorien und setzte seine Initiativen zur Portfolio-Neugestaltung fort.
- Reaffirmed fiscal 2025 guidance, showing confidence in business momentum
- Gained dollar share in snacking, staples, frozen single-serve meals, and frozen breakfast categories
- Reduced net debt by 5.8% compared to prior year period
- Increased dividends paid by 6.4% to $167 million
- Strong performance in Global Exports business
- Net sales decreased 3.8% to $2.8 billion
- Organic net sales declined 3.5%
- Reported operating margin fell 247 basis points to 14.4%
- Adjusted EPS decreased 19.7% to $0.53
- Gross profit decreased 10.2% to $739 million
- $27 million impact from temporary manufacturing disruptions in Hebrew National business
- Free cash flow decreased by $164 million to $136 million
Insights
Conagra Brands' Q1 FY2025 results show mixed performance. The 3.8% decrease in net sales to
However, there are some positive aspects:
- Market share gains across the portfolio
- Progress in portfolio reshaping initiatives
- Reaffirmation of FY2025 guidance, suggesting confidence in future performance
The temporary manufacturing disruptions in the Hebrew National business had a significant impact, reducing results by approximately
The company's focus on productivity improvements and strategic investments is notable, but these are currently being offset by inflation and lower sales. The 5.8% reduction in net debt is positive for the company's financial health.
Conagra's Q1 results reflect broader industry trends and consumer behavior shifts. The 1.6% decrease in volume suggests ongoing challenges in maintaining consumer demand. However, the company's ability to gain market share in key categories like microwave popcorn, seeds and frozen meals indicates effective product positioning and marketing strategies.
The 7.8% decrease in Foodservice segment sales, driven by an 11.1% volume decline, highlights the continued softness in restaurant traffic. This trend warrants attention as it may signal broader economic pressures affecting out-of-home dining.
Conagra's strategic investments and price/mix adjustments demonstrate a proactive approach to navigating the challenging environment. The company's ability to maintain its full-year guidance despite Q1 headwinds suggests confidence in its strategy and potential for recovery in subsequent quarters.
Investors should monitor the company's performance in inflation management and its ability to balance pricing strategies with volume retention in the coming quarters.
Highlights
- Reported net sales decreased
3.8% ; organic net sales decreased3.5% . - Reported operating margin was
14.4% representing a 247 basis point decrease. Adjusted operating margin was14.2% representing a 244 basis point decrease. - Reported diluted earnings per share (EPS) was
, a$0.97 44.8% increase. Adjusted EPS was , a$0.53 19.7% decrease. - The company is reaffirming its fiscal 2025 guidance reflecting:
- Organic net sales of (1.5)% to flat compared to fiscal 2024
- Adjusted operating margin between
15.6% and15.8% - Adjusted EPS between
and$2.60 $2.65 - Free cash flow conversion of approximately
90%
CEO Perspective
Sean Connolly, president and chief executive officer of Conagra Brands, commented, "Our team executed well to deliver on key priorities across the business during the first quarter in what continued to be a challenging environment. Our domestic retail volume progressed in-line with expectations, we increased share across the portfolio and advanced our portfolio reshaping initiatives. Overall, we are reaffirming our guidance for fiscal 2025, reflecting confidence in the underlying momentum of our business."
Total Company First Quarter Results
In the quarter, net sales decreased
- a
3.5% decrease in organic net sales, - a
0.4% decrease from the unfavorable impact of foreign exchange; and - a
0.1% increase from the favorable impact of M&A
The
Gross profit decreased
Selling, general, and administrative expense (SG&A), which includes advertising and promotional expense (A&P), increased
Net interest expense was
The average diluted share count in the quarter was 480 million shares reflecting
In the quarter, net income attributable to Conagra Brands increased
Adjusted EBITDA, which includes equity method investment earnings and pension and postretirement non-service expense (income), decreased
Grocery & Snacks Segment First Quarter Results
Net sales for the Grocery & Snacks segment decreased
- a
1.9% decrease in organic net sales; and - a
0.2% increase from the favorable impact of M&A.
The decrease in organic net sales was driven by a price/mix decrease of
Operating profit for the segment decreased
Refrigerated & Frozen Segment First Quarter Results
Reported and organic net sales for the Refrigerated & Frozen segment decreased
Operating profit for the segment decreased
International Segment First Quarter Results
Net sales for the International segment decreased
- a
3.4% decrease from the unfavorable impact of foreign exchange; and - a
3.0% increase in organic net sales.
On an organic net sales basis, price/mix increased
Operating profit for the segment increased
Foodservice Segment First Quarter Results
Net sales for the Foodservice segment decreased
- a
7.9% decrease in organic net sales; and - a
0.1% increase from the favorable impact of M&A.
Organic net sales were driven by a price/mix increase of
Operating profit for the segment decreased
Additionally, the company estimates that organic net sales in the quarter were impacted by approximately
Other First Quarter Items
Corporate expenses increased
The company incurred pension and post-retirement non-service income of
In the quarter, equity method investment earnings decreased
In the quarter, the effective tax rate was (42.4)% compared to
In the quarter, the company paid a dividend of
Cash Flow and Debt Update
For the first quarter, the company generated
The company ended the quarter with net debt of
Outlook
The company is reaffirming its fiscal 2025 guidance reflecting:
- Organic net sales of (1.5)% to flat compared to fiscal 2024
- Adjusted operating margin between
15.6% and15.8% - Adjusted EPS between
and$2.60 $2.65 - Free cash flow conversion of approximately
90% - Net leverage ratio of approximately 3.2x
Additionally, the company now expects capital expenditures of approximately
The inability to predict the amount and timing of the impacts of foreign exchange, acquisitions, divestitures, and other items impacting comparability makes a detailed reconciliation of forward-looking non-GAAP financial measures impracticable. Please see the end of this release for more information.
Items Affecting Comparability of EPS
The following are included in the
- Approximately
per diluted share of net expense related to restructuring plans$0.01 - Approximately
per diluted share of net benefit related to fire-related insurance recoveries$0.03 - Approximately
per diluted share of net expense related to legal matters$0.01 - Approximately
per diluted share of net benefit related to a valuation allowance adjustment$0.44 - Approximately
per diluted share of net expense related to rounding$0.01
The following are included in the
- Approximately
per diluted share of net expense due to restructuring plans$0.04 - Approximately
per diluted share of net benefit related to corporate hedging derivative gains$0.04 - Approximately
per diluted share of net benefit related to rounding$0.01
Please note that certain prior year amounts have been reclassified to conform with current year presentation.
Discussion of Results and Outlook
Conagra Brands will issue pre-recorded remarks prior to hosting a live Q&A conference call and webcast at 9:30 a.m. Eastern time today to discuss the company's results and outlook. The live audio webcast Q&A conference call, pre-recorded remarks, transcript of the pre-recorded remarks, and presentation slides will be available on www.conagrabrands.com/investor-relations under Events & Presentations. The Q&A conference call may be accessed by dialing 1‑877‑883‑0383 for participants in the
About Conagra Brands
Conagra Brands, Inc. (NYSE: CAG), is one of
Note on Forward-Looking Statements
This document contains forward-looking statements within the meaning of the federal securities laws. Examples of forward-looking statements include statements regarding the company's expected future financial performance or position, results of operations, business strategy, plans and objectives of management for future operations, and other statements that are not historical facts. You can identify forward-looking statements by their use of forward-looking words, such as "may", "will", "anticipate", "expect", "believe", "plan", "should", or comparable terms. Readers of this document should understand that these statements are not guarantees of performance or results. Forward-looking statements provide our current expectations and beliefs concerning future events and are subject to risks, uncertainties, and factors relating to our business and operations, all of which are difficult to predict and could cause our actual results to differ materially from the expectations expressed in or implied by such forward-looking statements. These risks, uncertainties, and factors include, among other things: risks associated with general economic and industry conditions, including inflation, reduced consumer confidence and spending, recessions, increased energy costs, supply chain challenges, labor shortages, and geopolitical conflicts; risks related to our ability to deleverage on currently anticipated timelines, and to continue to access capital on acceptable terms or at all; risks related to the company's competitive environment, cost structure, and related market conditions; risks related to our ability to execute operating and value creation plans and achieve returns on our investments and targeted operating efficiencies from cost-saving initiatives, and to benefit from trade optimization programs; risks related to the availability and prices of commodities and other supply chain resources, including raw materials, packaging, energy, and transportation, weather conditions, health pandemics or outbreaks of disease, actual or threatened hostilities or war, or other geopolitical uncertainty; risks related to our ability to respond to changing consumer preferences and the success of our innovation and marketing investments; risks associated with actions by our customers, including changes in distribution and purchasing terms; risks related to the effectiveness of our hedging activities and ability to respond to volatility in commodities; disruptions or inefficiencies in our supply chain and/or operations; risks related to the ultimate impact of, including reputational harm caused by, any product recalls and product liability or labeling litigation, including litigation related to lead-based paint and pigment and cooking spray; risks related to the seasonality of our business; risks associated with our co-manufacturing arrangements and other third-party service provider dependencies; risks associated with actions of governments and regulatory bodies that affect our businesses, including the ultimate impact of new or revised regulations or interpretations including to address climate change or implement changes to taxes and tariffs; risks related to the company's ability to execute on its strategies or achieve expectations related to environmental, social, and governance matters, including as a result of evolving legal, regulatory, and other standards, processes, and assumptions, the pace of scientific and technological developments, increased costs, the availability of requisite financing, and changes in carbon pricing or carbon taxes; risks related to a material failure in or breach of our or our vendors' information technology systems and other cybersecurity incidents; risks related to our ability to identify, attract, hire, train, retain and develop qualified personnel; risk of increased pension, labor or people-related expenses; risks and uncertainties associated with intangible assets, including any future goodwill or intangible assets impairment charges; risk relating to our ability to protect our intellectual property rights; risks relating to acquisition, divestiture, joint venture or investment activities; the amount and timing of future dividends, which remain subject to Board approval and depend on market and other conditions; the amount and timing of future stock repurchases; and other risks described in our reports filed from time to time with the Securities and Exchange Commission.
We caution readers not to place undue reliance on any forward-looking statements included in this document, which speak only as of the date of this document. We undertake no responsibility to update these statements, except as required by law.
Note on Non-GAAP Financial Measures
This document includes certain non-GAAP financial measures, including adjusted EPS, organic net sales, adjusted gross profit, adjusted operating profit, adjusted SG&A, adjusted corporate expenses, adjusted gross margin, adjusted operating margin, adjusted effective tax rate, adjusted net income attributable to Conagra Brands, free cash flow, net debt, net leverage ratio, and adjusted EBITDA. Management considers GAAP financial measures as well as such non-GAAP financial information in its evaluation of the company's financial statements and believes these non-GAAP financial measures provide useful supplemental information to assess the company's operating performance and financial position. These measures should be viewed in addition to, and not in lieu of, the company's diluted earnings per share, operating performance and financial measures as calculated in accordance with GAAP.
Organic net sales excludes, from reported net sales, the impacts of foreign exchange, divested businesses and acquisitions, as well as the impact of any 53rd week. All references to changes in volume and price/mix throughout this release are on an organic net sales basis.
Free cash flow is net cash from operating activities less additions to property, plant and equipment. Free cash flow conversion is free cash flow divided by adjusted net income attributable to Conagra Brands, Inc.
References to adjusted items throughout this release refer to measures computed in accordance with GAAP less the impact of items impacting comparability. Items impacting comparability are income or expenses (and related tax impacts) that management believes have had, or are likely to have, a significant impact on the earnings of the applicable business segment or on the total corporation for the period in which the item is recognized, and are not indicative of the company's core operating results. These items thus affect the comparability of underlying results from period to period.
References to earnings before interest, taxes, depreciation, and amortization (EBITDA) refer to net income attributable to Conagra Brands before the impacts of discontinued operations, income tax expense (benefit), interest expense, depreciation, and amortization. References to adjusted EBITDA refer to EBITDA before the impacts of items impacting comparability.
Hedge gains and losses are generally aggregated, and net amounts are reclassified from unallocated corporate expense to the operating segments when the underlying commodity or foreign currency being hedged is expensed in segment cost of goods sold. The net change in the derivative gains (losses) included in unallocated corporate expense during the period is reflected as a comparability item, Corporate hedging derivate gains (losses).
Note on Forward-Looking Non-GAAP Financial Measures
The company's fiscal 2025 guidance includes certain non-GAAP financial measures (organic net sales growth, adjusted operating margin, adjusted EPS, net leverage ratio, and adjusted effective tax rate) that are presented on a forward-looking basis. Historically, the company has calculated these non-GAAP financial measures excluding the impact of certain items such as, but not limited to, foreign exchange, acquisitions, divestitures, restructuring expenses, the extinguishment of debt, hedging gains and losses, impairment charges, legacy legal contingencies, and unusual tax items. Reconciliations of these forward-looking non-GAAP financial measures to the most directly comparable GAAP financial measures are not provided because the company is unable to provide such reconciliations without unreasonable effort, due to the uncertainty and inherent difficulty of predicting the timing and financial impact of such items. For the same reasons, the company is unable to address the probable significance of the unavailable information, which could be material to future results.
Conagra Brands, Inc. Consolidated Statements of Earnings (in millions) (unaudited)
| ||||||||
FIRST QUARTER | ||||||||
Thirteen Weeks Ended | Thirteen Weeks Ended | |||||||
August 25, 2024 | August 27, 2023 | Percent Change | ||||||
Net sales | $ | 2,794.9 | $ | 2,904.0 | (3.8) % | |||
Costs and expenses: | ||||||||
Cost of goods sold | 2,055.6 | 2,080.9 | (1.2) % | |||||
Selling, general and administrative expenses | 337.7 | 334.1 | 1.1 % | |||||
Pension and postretirement non-service income (expense) | 3.1 | (0.3) | N/A | |||||
Interest expense, net | 105.8 | 106.0 | (0.1) % | |||||
Equity method investment earnings | 29.1 | 35.5 | (18.1) % | |||||
Income before income taxes | $ | 328.0 | $ | 418.2 | (21.6) % | |||
Income tax expense (benefit) | (138.9) | 98.3 | N/A | |||||
Net income | $ | 466.9 | $ | 319.9 | 45.9 % | |||
Less: Net income attributable to noncontrolling interests | 0.1 | 0.2 | (62.6) % | |||||
Net income attributable to Conagra Brands, Inc. | $ | 466.8 | $ | 319.7 | 46.0 % | |||
Earnings per share - basic | ||||||||
Net income attributable to Conagra Brands, Inc. | $ | 0.97 | $ | 0.67 | 44.8 % | |||
Basic weighted average shares outstanding | 478.8 | 478.2 | 0.1 % | |||||
Earnings per share - diluted | ||||||||
Net income attributable to Conagra Brands, Inc. | $ | 0.97 | $ | 0.67 | 44.8 % | |||
Diluted weighted average shares outstanding | 480.3 | 479.8 | 0.1 % |
Conagra Brands, Inc. Consolidated Balance Sheets (in millions) (unaudited)
| ||||||
August 25, 2024 | May 26, 2024 | |||||
ASSETS | ||||||
Current assets | ||||||
Cash and cash equivalents | $ | 128.7 | $ | 77.7 | ||
Receivables, less allowance for doubtful accounts of | 933.4 | 871.8 | ||||
Inventories | 2,220.6 | 2,083.0 | ||||
Prepaid expenses and other current assets | 133.5 | 85.0 | ||||
Current assets held for sale | — | 32.0 | ||||
Total current assets | 3,416.2 | 3,149.5 | ||||
Property, plant and equipment, net | 2,877.0 | 2,875.5 | ||||
Goodwill | 10,758.0 | 10,582.7 | ||||
Brands, trademarks and other intangibles, net | 2,756.4 | 2,708.4 | ||||
Other assets | 1,419.0 | 1,435.6 | ||||
Noncurrent assets held for sale | 21.2 | 110.6 | ||||
$ | 21,247.8 | $ | 20,862.3 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||
Current liabilities | ||||||
Notes payable | $ | 1,266.4 | $ | 928.4 | ||
Current installments of long-term debt | 20.2 | 20.3 | ||||
Accounts and other payables | 1,537.7 | 1,493.7 | ||||
Accrued payroll | 108.2 | 193.3 | ||||
Other accrued liabilities | 714.3 | 591.3 | ||||
Current liabilities held for sale | — | 14.8 | ||||
Total current liabilities | 3,646.8 | 3,241.8 | ||||
Senior long-term debt, excluding current installments | 7,485.6 | 7,492.6 | ||||
Other noncurrent liabilities | 1,419.8 | 1,614.7 | ||||
Noncurrent liabilities held for sale | — | 1.9 | ||||
Total stockholders' equity | 8,695.6 | 8,511.3 | ||||
$ | 21,247.8 | $ | 20,862.3 |
Conagra Brands, Inc. and Subsidiaries Condensed Consolidated Statements of Cash Flows (in millions)
| ||||||
Thirteen Weeks Ended | Thirteen Weeks Ended | |||||
August 25, 2024 | August 27, 2023 | |||||
Cash flows from operating activities: | ||||||
Net income | $ | 466.9 | $ | 319.9 | ||
Adjustments to reconcile net income to net cash flows from operating activities: | ||||||
Depreciation and amortization | 99.1 | 96.6 | ||||
Asset impairment charges | 0.1 | 15.2 | ||||
Equity method investment earnings in excess of distributions | (5.2) | (6.7) | ||||
Stock-settled share-based payments expense (benefit) | 20.6 | (2.7) | ||||
Contributions to pension plans | (2.9) | (3.1) | ||||
Pension expense (benefit) | (0.8) | 2.8 | ||||
Other items | 11.6 | 10.5 | ||||
Change in operating assets and liabilities excluding effects of business acquisitions and dispositions: | ||||||
Receivables | (60.1) | (11.1) | ||||
Inventories | (112.5) | (161.8) | ||||
Deferred income taxes and income taxes payable, net | (165.9) | 90.6 | ||||
Prepaid expenses and other current assets | (43.0) | (35.6) | ||||
Accounts and other payables | 67.7 | 81.4 | ||||
Accrued payroll | (83.7) | (49.0) | ||||
Other accrued liabilities | 84.4 | 95.4 | ||||
Litigation accruals | (7.7) | 1.1 | ||||
Net cash flows from operating activities | 268.6 | 443.5 | ||||
Cash flows from investing activities: | ||||||
Additions to property, plant and equipment | (133.0) | (143.6) | ||||
Sale of property, plant and equipment | 0.3 | 0.2 | ||||
Purchase of marketable securities | — | (0.7) | ||||
Sale of marketable securities | — | 0.7 | ||||
Purchase of business, net of cash acquired | (230.4) | — | ||||
Proceeds from divestitures, net of cash divested | 76.8 | — | ||||
Other items | — | 5.0 | ||||
Net cash flows from investing activities | (286.3) | (138.4) | ||||
Cash flows from financing activities: | ||||||
Issuances of short-term borrowings, maturities greater than 90 days | 35.1 | 43.5 | ||||
Repayment of short-term borrowings, maturities greater than 90 days | (35.3) | (54.8) | ||||
Net issuance (repayment) of other short-term borrowings, maturities less than or equal to 90 days | 336.4 | (117.0) | ||||
Issuance of long-term debt | — | 500.0 | ||||
Repayment of long-term debt | (14.9) | (504.3) | ||||
Debt issuance costs | — | (2.8) | ||||
Repurchase of Conagra Brands, Inc. common shares | (64.0) | — | ||||
Cash dividends paid | (167.3) | (157.4) | ||||
Exercise of stock options and issuance of other stock awards, including tax withholdings | (19.8) | (13.7) | ||||
Other items | (0.1) | (0.6) | ||||
Net cash flows from financing activities | 70.1 | (307.1) | ||||
Effect of exchange rate changes on cash and cash equivalents | (2.7) | 1.4 | ||||
Net change in cash and cash equivalents, including cash balances classified as assets held for sale | 49.7 | (0.6) | ||||
Less: Net change in cash balances classified as assets held for sale | (1.3) | 1.0 | ||||
Net change in cash and cash equivalents | 51.0 | (1.6) | ||||
Cash and cash equivalents at beginning of period | 77.7 | 93.3 | ||||
Cash and cash equivalents at end of period | $ | 128.7 | $ | 91.7 |
Conagra Brands, Inc. Reconciliation of Q1 FY25 Organic Net Sales by Segment - YOY Change (in millions)
| |||||||||||||||
Refrigerated & | Total Conagra | ||||||||||||||
Q1 FY25 | Grocery & Snacks | Frozen | International | Foodservice | Brands | ||||||||||
Net Sales | $ | 1,182.7 | $ | 1,086.4 | $ | 259.1 | $ | 266.7 | $ | 2,794.9 | |||||
Impact of foreign exchange | — | — | 9.0 | — | 9.0 | ||||||||||
Net sales from acquired businesses | (2.7) | — | — | (0.2) | (2.9) | ||||||||||
Organic Net Sales | $ | 1,180.0 | $ | 1,086.4 | $ | 268.1 | $ | 266.5 | $ | 2,801.0 | |||||
Year-over-year change - Net Sales | (1.7) % | (5.7) % | (0.4) % | (7.8) % | (3.8) % | ||||||||||
Impact of foreign exchange (pp) | — | — | 3.4 | — | 0.4 | ||||||||||
Net sales from acquired businesses (pp) | (0.2) | — | — | (0.1) | (0.1) | ||||||||||
Organic Net Sales | (1.9) % | (5.7) % | 3.0 % | (7.9) % | (3.5) % | ||||||||||
Volume (Organic) | (1.8) % | 0.1 % | 0.6 % | (11.1) % | (1.6) % | ||||||||||
Price/Mix | (0.1) % | (5.8) % | 2.4 % | 3.2 % | (1.9) % | ||||||||||
Refrigerated & | Total Conagra | ||||||||||||||
Q1 FY24 | Grocery & Snacks | Frozen | International | Foodservice | Brands | ||||||||||
Net Sales | $ | 1,202.9 | $ | 1,151.6 | $ | 260.2 | $ | 289.3 | $ | 2,904.0 | |||||
Net sales from divested businesses | — | — | — | — | — | ||||||||||
Organic Net Sales | $ | 1,202.9 | $ | 1,151.6 | $ | 260.2 | $ | 289.3 | $ | 2,904.0 |
Conagra Brands, Inc. Reconciliation of Q1 FY25 Adj. Operating Profit by Segment - YOY Change (in millions) | ||||||||||||||||||
Grocery & | Refrigerated & | Corporate | Total Conagra | |||||||||||||||
Q1 FY25 | Snacks | Frozen | International | Foodservice | Expense | Brands | ||||||||||||
Operating Profit | $ | 249.1 | $ | 176.0 | $ | 33.6 | $ | 35.1 | $ | (92.2) | $ | 401.6 | ||||||
Restructuring plans | 4.2 | 0.1 | (0.1) | — | 0.1 | 4.3 | ||||||||||||
Legal matters | — | — | — | — | 3.4 | 3.4 | ||||||||||||
Fire related insurance recoveries | — | (17.0) | — | — | — | (17.0) | ||||||||||||
Consulting fees on tax matters | — | — | — | — | 2.0 | 2.0 | ||||||||||||
Loss on sale of business | — | — | 2.3 | — | — | 2.3 | ||||||||||||
Corporate hedging derivative losses (gains) | — | — | — | — | 1.3 | 1.3 | ||||||||||||
Adjusted Operating Profit | $ | 253.3 | $ | 159.1 | $ | 35.8 | $ | 35.1 | $ | (85.4) | $ | 397.9 | ||||||
Operating Profit Margin | 21.1 % | 16.2 % | 13.0 % | 13.2 % | 14.4 % | |||||||||||||
Adjusted Operating Profit Margin | 21.4 % | 14.6 % | 13.8 % | 13.2 % | 14.2 % | |||||||||||||
Year-over-year % change - Operating Profit | (3.7) % | (11.6) % | 42.1 % | (20.4) % | 151.2 % | (17.9) % | ||||||||||||
Year-over year % change - Adjusted Operating Profit | (3.8) % | (21.0) % | (15.5) % | (13.8) % | 34.1 % | (17.8) % | ||||||||||||
Year-over-year bps change - Operating Profit | (44) bps | (110) bps | 388 bps | (209) bps | (247) bps | |||||||||||||
Year-over-year bps change - Adjusted Operating Profit | (48) bps | (284) bps | (247) bps | (92) bps | (244) bps | |||||||||||||
Grocery & | Refrigerated & | Corporate | Total Conagra | |||||||||||||||
Q1 FY24 | Snacks | Frozen | International | Foodservice | Expense | Brands | ||||||||||||
Operating Profit | $ | 258.7 | $ | 199.2 | $ | 23.7 | $ | 44.1 | $ | (36.7) | $ | 489.0 | ||||||
Restructuring plans | 4.8 | 0.6 | 18.6 | — | 0.4 | 24.4 | ||||||||||||
Acquisitions and divestitures | — | — | — | — | 0.2 | 0.2 | ||||||||||||
Fire related costs (insurance recoveries), net | — | 1.6 | — | (3.3) | — | (1.7) | ||||||||||||
Corporate hedging derivative losses (gains) | — | — | — | — | (27.6) | (27.6) | ||||||||||||
Adjusted Operating Profit | $ | 263.5 | $ | 201.4 | $ | 42.3 | $ | 40.8 | $ | (63.7) | $ | 484.3 | ||||||
Operating Profit Margin | 21.5 % | 17.3 % | 9.1 % | 15.3 % | 16.8 % | |||||||||||||
Adjusted Operating Profit Margin | 21.9 % | 17.5 % | 16.3 % | 14.1 % | 16.7 % |
Conagra Brands, Inc. Reconciliation of Q1 FY25 Adj. Gross Margin, Adj. Gross Profit, Adj. SG&A, Adj. Net Income, and Adj. EPS - YOY Change (in millions) | |||||||||||||||||||||||
Q1 FY25 | Gross profit | Selling, | Operating | Income | Income tax | Income tax | Net income | Diluted EPS | |||||||||||||||
Reported | $ | 739.3 | $ | 337.7 | $ | 401.6 | $ | 328.0 | $ | (138.9) | (42.4) % | $ | 466.8 | $ | 0.97 | ||||||||
% of Net Sales | 26.5 % | 12.1 % | 14.4 % | ||||||||||||||||||||
Restructuring plans | 2.1 | 2.2 | 4.3 | 4.3 | 1.1 | 3.2 | 0.01 | ||||||||||||||||
Loss on sale of business | — | 2.3 | 2.3 | 2.3 | 0.8 | 1.5 | — | ||||||||||||||||
Corporate hedging derivative losses (gains) | 1.3 | — | 1.3 | 1.3 | 0.1 | 1.2 | — | ||||||||||||||||
Advertising and promotion expenses 2 | — | 50.4 | — | — | — | — | — | ||||||||||||||||
Fire related insurance recoveries | (17.0) | — | (17.0) | (17.0) | (4.2) | (12.8) | (0.03) | ||||||||||||||||
Consulting fees on tax matters | — | 2.0 | 2.0 | 2.0 | 0.5 | 1.5 | — | ||||||||||||||||
Legal matters | — | 3.4 | 3.4 | 3.4 | 0.8 | 2.6 | 0.01 | ||||||||||||||||
Valuation allowance adjustment | — | — | — | — | 211.4 | (211.4) | (0.44) | ||||||||||||||||
Rounding | — | — | — | — | — | — | 0.01 | ||||||||||||||||
Adjusted | $ | 725.7 | $ | 277.4 | $ | 397.9 | $ | 324.3 | $ | 71.6 | 22.1 % | $ | 252.6 | $ | 0.53 | ||||||||
% of Net Sales | 26.0 % | 9.9 % | 14.2 % | ||||||||||||||||||||
Year-over-year % of net sales | (189) bps | 58 bps | (247) bps | ||||||||||||||||||||
Year-over-year % of net sales | (163) bps | 102 bps | (244) bps | ||||||||||||||||||||
Year-over-year change - reported | (10.2) % | 1.1 % | (17.9) % | (21.6) % | N/A | 46.0 % | 44.8 % | ||||||||||||||||
Year-over-year change - adjusted | (9.4) % | 7.3 % | (17.8) % | (21.6) % | (26.4) % | (20.0) % | (19.7) % | ||||||||||||||||
Q1 FY24 | Gross profit | Selling, | Operating | Income | Income tax | Income tax | Net income | Diluted EPS | |||||||||||||||
Reported | $ | 823.1 | $ | 334.1 | $ | 489.0 | $ | 418.2 | $ | 98.3 | 23.5 % | $ | 319.7 | $ | 0.67 | ||||||||
% of Net Sales | 28.3 % | 11.5 % | 16.8 % | ||||||||||||||||||||
Restructuring plans | 4.3 | 20.1 | 24.4 | 24.4 | 6.3 | 18.1 | 0.04 | ||||||||||||||||
Acquisitions and divestitures | — | 0.2 | 0.2 | 0.2 | — | 0.2 | — | ||||||||||||||||
Corporate hedging derivative losses (gains) | (27.6) | — | (27.6) | (27.6) | (6.8) | (20.8) | (0.04) | ||||||||||||||||
Advertising and promotion expenses 2 | — | 58.7 | — | — | — | — | — | ||||||||||||||||
Fire related costs (insurance recoveries), net | 1.6 | (3.3) | (1.7) | (1.7) | (0.4) | (1.3) | — | ||||||||||||||||
Rounding | — | — | — | — | — | — | (0.01) | ||||||||||||||||
Adjusted | $ | 801.4 | $ | 258.4 | $ | 484.3 | $ | 413.5 | $ | 97.4 | 23.6 % | $ | 315.9 | $ | 0.66 | ||||||||
% of Net Sales | 27.6 % | 8.9 % | 16.7 % |
1 Operating profit is derived from taking Income before income taxes, adding back Interest expense, net and removing Pension and postretirement non-service income and Equity method investment earnings. |
2 Advertising and promotion expense (A&P) has been removed from adjusted selling, general and administrative expense because this metric is used in reporting to management, and management believes this adjusted measure provides useful supplemental information to assess the company's operating performance. Please note that A&P is not removed from adjusted profit measures. |
Conagra Brands, Inc. Reconciliation of Free Cash Flow, Net Debt, and Net Leverage Ratio (in millions) | ||||||||
Q1 FY25 | Q1 FY24 | % Change | ||||||
Net cash flows from operating activities | $ | 268.6 | $ | 443.5 | (39.4) % | |||
Additions to property, plant and equipment | (133.0) | (143.6) | (7.4) % | |||||
Free cash flow | $ | 135.6 | $ | 299.9 | (54.8) % |
August 25, 2024 | August 27, 2023 | |||||
Notes payable | $ | 1,266.4 | $ | 509.3 | ||
Current installments of long-term debt | 20.2 | 1,015.4 | ||||
Senior long-term debt, excluding current installments | 7,485.6 | 7,745.1 | ||||
Total Debt | $ | 8,772.2 | $ | 9,269.8 | ||
Less: Cash | 128.7 | 91.7 | ||||
Net Debt | $ | 8,643.5 | $ | 9,178.1 |
FY24 | Q1 FY24 | Q1 FY25 | Q1 FY25 TTM | |||||||||
(a) | (b) | (c) | (a)-(b)+(c) | |||||||||
Net Debt1 | $ | 8,643.5 | ||||||||||
Net income attributable to Conagra Brands, Inc. | $ | 347.2 | $ | 319.7 | $ | 466.8 | $ | 494.3 | ||||
Add Back: Income tax expense (benefit) | 262.5 | 98.3 | (138.9) | 25.3 | ||||||||
Income tax expense attributable to noncontrolling interests | (0.2) | — | — | (0.2) | ||||||||
Interest expense, net | 430.5 | 106.0 | 105.8 | 430.3 | ||||||||
Depreciation | 347.3 | 83.1 | 85.7 | 349.9 | ||||||||
Amortization | 53.6 | 13.5 | 13.4 | 53.5 | ||||||||
Earnings before interest, taxes, depreciation, and amortization (EBITDA) | $ | 1,440.9 | $ | 620.6 | $ | 532.8 | $ | 1,353.1 | ||||
Restructuring plans2 | 51.5 | 21.0 | 2.9 | 33.4 | ||||||||
Acquisitions and divestitures | 0.2 | 0.2 | — | — | ||||||||
Impairment of business held for sale | 36.4 | — | — | 36.4 | ||||||||
Corporate hedging derivative losses (gains) | (16.1) | (27.6) | 1.3 | 12.8 | ||||||||
Goodwill and brand impairment charges | 956.7 | — | — | 956.7 | ||||||||
Legal matters, net of recoveries | 34.8 | — | 3.4 | 38.2 | ||||||||
Fire related insurance recoveries, net | (8.7) | (1.7) | (17.0) | (24.0) | ||||||||
Loss on sale of business | — | — | 2.3 | 2.3 | ||||||||
Pension settlement and valuation adjustment | (11.5) | — | — | (11.5) | ||||||||
Consulting fees on tax matters | — | — | 2.0 | 2.0 | ||||||||
Adjusted EBITDA | $ | 2,484.2 | $ | 612.5 | $ | 527.7 | $ | 2,399.4 | ||||
Net Debt to Adjusted EBITDA3 | 3.60 |
1 As of August 25, 2024. |
2 Excludes comparability items related to depreciation. |
3 The company defines its net debt leverage ratio as net debt divided by adjusted EBITDA for the trailing twelve month (TTM) period. |
Conagra Brands, Inc. Reconciliation of Q1 FY25 EBITDA - YOY Change (in millions)
| ||||||||
Q1 FY25 | Q1 FY24 | % Change | ||||||
Net income attributable to Conagra Brands, Inc. | $ | 466.8 | $ | 319.7 | 46.0 % | |||
Add Back: Income tax expense (benefit) | (138.9) | 98.3 | ||||||
Interest expense, net | 105.8 | 106.0 | ||||||
Depreciation | 85.7 | 83.1 | ||||||
Amortization | 13.4 | 13.5 | ||||||
Earnings before interest, taxes, depreciation, and amortization | $ | 532.8 | $ | 620.6 | (14.1) % | |||
Restructuring plans 1 | 2.9 | 21.0 | ||||||
Acquisitions and divestitures | — | 0.2 | ||||||
Corporate hedging derivative losses (gains) | 1.3 | (27.6) | ||||||
Fire related insurance recoveries, net | (17.0) | (1.7) | ||||||
Consulting fees on tax matters | 2.0 | — | ||||||
Legal matters | 3.4 | — | ||||||
Loss on sale of business | 2.3 | — | ||||||
Adjusted Earnings before interest, taxes, depreciation, and amortization | $ | 527.7 | $ | 612.5 | (13.8) % |
1 Excludes comparability items related to depreciation. |
For more information, please contact:
MEDIA: Mike Cummins
312‑549‑5257
Michael.Cummins@conagra.com
INVESTORS: Melissa Napier
312‑549‑5738
IR@conagra.com
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SOURCE Conagra Brands, Inc.
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