ConAgra Brands Q2 Highlights: 8% Top-Line Growth, Margin Recovery, Outlook Boost & More

  • ConAgra Brands Inc CAG reported second-quarter FY23 sales growth of 8.3% year-on-year to $3.31 billion, beating the consensus of $3.28 billion.
  • Grocery & Snacks segment sales increased 6.8% Y/Y to $1.3 billion, and Refrigerated & Frozen segment sales increased 10.5% Y/Y to $1.4 billion.
  • Adjusted EPS of $0.81 beat the consensus of $0.66.
  • Adjusted gross profit rose 21.7% to $933 million. Gross margin increased 316 basis points to 27.8%, and adjusted gross margin increased 310 basis points to 28.2%.
  • Operating margin expanded 320 basis points in the quarter to 16.6%, and adjusted operating margin increased 237 basis points to 17.0%.
  • The company reported $372.7 million in selling, general, and administrative expenses, a 7.9% increase Y/Y.
  • Adjusted EBITDA of $710 million increased 21.5% Y/Y.
  • Cash and equivalents totaled $39.7 million as of November 27, 2022. Cash flow from operating activities for six months totaled $297.8 million.
  • CAG's quarterly dividend payment of $0.33 per share will be paid on March 2, 2023, to stockholders of record on January 30, 2023.
  • "We are raising our fiscal 2023 guidance on all metrics - organic net sales growth, adjusted operating margin, and adjusted earnings per share due to continued positive business momentum and our strong first half performance," said CEO Sean Connolly.
  • Outlook: ConAgra sees FY23 organic net sales growth of 7% - 8% (prior view 4% - 5%).
  • ConAgra expects FY23 adjusted EPS of $2.60 - $2.70 (consensus $2.47), representing growth of 10% - 14% (prior view 1% - 5% growth).
  • Price Action: CAG shares are trading higher by 3.29% at $39.92 in premarket on the last check Thursday.
  • Photo Via Company
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