Conagra Brands Clocks 5% Top-Line Growth In Q3; Cuts FY22 EPS Outlook

  • Conagra Brands Inc CAG reported third-quarter FY22 sales growth of 5.1% year-on-year, to $2.91 billion, beating the consensus of $2.84 billion.
  • Grocery & Snacks segment sales increased 6.2% Y/Y to $1.2 billion, and Refrigerated & Frozen segment sales increased 2.9% Y/Y to $1.2 billion.
  • Adjusted EPS of $0.58 was in line with the consensus.
  • Adjusted gross profit fell 7.9% to $701 million. The gross margin decreased 344 basis points Y/Y to 23.9%, and the adjusted gross margin decreased 342 basis points to 24.1%.
  • Adjusted operating margin decreased 230 basis points Y/Y to 13.7%.
  • The company reported $237 million in adjusted selling, general, and administrative expense, a 3.3% decrease Y/Y.
  • Adjusted EBITDA of $553 million fell 2.4% Y/Y.
  • Cash and equivalents totaled $79.7 million as of February 27, 2022.
  • "We experienced higher-than-expected cost pressures as the third quarter progressed and expect those pressures to continue into the fourth quarter, particularly in certain frozen, refrigerated, and snacks businesses," said CEO Sean Connolly.
  • Outlook: Conagra sees an organic net sales growth outlook of +7% for Q4. The company expects Q4 adjusted EPS of about $0.64 versus the consensus of $0.70.
  • Conagra sees FY22 organic net sales growth of +4% versus the prior outlook of +3%. It expects FY22 adjusted EPS of $2.35 versus previous guidance of $2.50 and the consensus of $2.42.
  • Price Action: CAG shares are trading lower by 2.45% at $33.50 in premarket on the last check Thursday.
Posted In: BriefsEarningsNewsGuidance