Organic sales fell 0.3% Y/Y in Q1, led by a 6.6% Y/Y decline in volume on an industry-wide slowdown in consumption and recent consumer behavior shifts.

Grocery & Snacks segment sales increased 1.2% Y/Y to $1.2 billion, and Refrigerated & Frozen segment sales fell 4.6% Y/Y to $1.2 billion.

Adjusted gross profit increased 10.9% to $801 million, driven by inflation-driven pricing implemented in FY23 and productivity. Adjusted gross margin increased 272 basis points to 27.6%.

Adjusted EPS increased 15.8% to $0.66, beating the consensus of $0.60.

The company exited the quarter with $93.3 million in cash and equivalents. 

Outlook: ConAgra reaffirmed FY24 organic net sales growth of 1% and adjusted EPS of $2.70-$2.75 (consensus $2.72).

For Q2, the company expects organic net sales to decrease in low-single digits as volume declines improve as inflation-driven pricing actions are wrapped. 

CAG projects Q2 gross and operating margins below Q1 owing to incremental trade and A&P investment. 

For H2, the company sees organic net sales growth in low-single digits on higher volumes, with margins similar to Q2 on elevated trade and A&P dollars.  

Price Action: CAG shares are trading higher by 0.62% at $26.69 on the last check Thursday.