CHICAGO, Oct. 5, 2023
/PRNewswire/ -- Today Conagra Brands, Inc. (NYSE: CAG) reported
results for the first quarter of fiscal year 2024, which ended on
August 27, 2023. All comparisons are
against the prior-year fiscal period, unless otherwise
noted.
Highlights
- First quarter net sales were flat to the prior year; organic
net sales decreased 0.3%
- Operating margin in the quarter was 16.8% representing a 1,757
basis point increase over the prior year quarter. Adjusted
operating margin was 16.7% representing a 297 basis point increase
over the prior year quarter
- Diluted earnings per share (EPS) for the first quarter was
$0.67 compared to a diluted loss per
share of $0.16 in the prior year
quarter. Adjusted EPS was $0.66,
representing a 15.8% increase over the prior year quarter
- The company is reaffirming its fiscal 2024 guidance reflecting:
- Organic net sales growth of approximately 1.0% compared to
fiscal 2023
- Adjusted operating margin between 16.0% and 16.5%
- Adjusted EPS between $2.70 and
$2.75
CEO Perspective
Sean Connolly, president and
chief executive officer of Conagra Brands, commented, "I am proud
of our team for delivering another quarter of strong margin
recovery and EPS growth despite facing industry-wide macro dynamics
that have affected consumer purchasing behavior and elongated the
volume recovery period. We will continue to focus on executing our
Conagra Way playbook as we make targeted and disciplined
investments throughout the remainder of the year to drive the
top-line. We are reaffirming our guidance for fiscal 2024,
reflecting confidence in our plans, people and agility as we
continue to navigate a shifting consumer environment."
Total Company First Quarter Results
In the quarter, net sales were $2.9 billion reflecting:
- a 0.3% increase from the favorable impact of foreign
exchange; and
- a 0.3% decrease in organic net sales.
The 0.3% decrease in organic net sales was driven by a 6.6%
decrease in volume largely due to industry-wide slowdown in
consumption and recent consumer behavior shifts, partially offset
by a 6.3% improvement in price/mix.
Gross profit increased 14.3% to $823
million in the quarter, and adjusted gross profit increased
10.9% to $801 million. First quarter
gross profit increased primarily as a result of inflation-driven
pricing that was implemented in fiscal 2023 and productivity, which
more than offset the negative impacts of cost of goods sold
inflation, unfavorable operating leverage, and lower organic net
sales. Gross margin increased 354 basis points to 28.3% in the
quarter, and adjusted gross margin increased 272 basis points to
27.6%.
Selling, general, and administrative expense (SG&A), which
includes advertising and promotional expense (A&P), decreased
54.9% to $334 million in the quarter
due primarily to the goodwill and brand impairments that occurred
in the prior year quarter. Adjusted SG&A, which excludes
A&P, decreased 1.5% to $258
million driven by lower incentive compensation compared to
the prior year quarter.
A&P for the quarter decreased 5.3% to $59 million, driven primarily by timing of modern
marketing initiatives.
Net interest expense was $106
million in the quarter. Compared to the prior-year period,
net interest expense increased 9.2% or $9
million, primarily due to a higher weighted average interest
rate on outstanding debt.
The average diluted share count in the quarter was 480 million
shares.
In the quarter, net income attributable to Conagra Brands was
$320 million, or $0.67 per diluted share compared to a net loss of
$0.16 per diluted share in the prior
year quarter. Adjusted net income attributable to Conagra Brands
increased 15.0% to $316 million, or
$0.66 per diluted share. The increase
was driven primarily by the increase in gross profit and decrease
in SG&A, as previously discussed.
Adjusted EBITDA, which includes equity method investment
earnings and pension and postretirement non-service expense
(income), increased 12.1% to $613
million in the quarter, primarily driven by the increase in
adjusted gross profit.
Grocery & Snacks Segment First Quarter
Results
Reported and organic net sales for the Grocery & Snacks
segment increased 1.2% to $1.2
billion in the quarter driven by a price/mix increase of
5.6%, partially offset by a volume decrease of 4.4% from
industry-wide consumption trends. In the quarter, the company
gained dollar share in snacking categories including seeds and
microwave popcorn, and some staples categories including chili and
canned meat.
Operating profit for the segment increased 3.3% to $259 million in the quarter. Adjusted operating
profit increased 3.8% to $264 million
as higher organic net sales and productivity more than offset the
negative impacts of cost of goods sold inflation, unfavorable
operating leverage, and higher A&P and SG&A.
Refrigerated & Frozen Segment First Quarter
Results
Reported and organic net sales for the Refrigerated & Frozen
segment decreased 4.6% to $1.2
billion in the quarter due to a volume decrease of 10.5%
from industry-wide consumption trends, partially offset by a price
mix increase of 5.9%. In the quarter, the company gained dollar
share in categories such as frozen sides and frozen breakfast
sausage.
Operating profit for the segment was $199
million in the quarter compared to a $216 million loss in the prior year quarter.
Adjusted operating profit increased 14.7% to $201 million as productivity and lower A&P
more than offset the negative impacts of lower organic net sales,
unfavorable operating leverage, cost of goods sold inflation, and
increased SG&A.
International Segment First Quarter Results
Net sales for the International
segment increased 11.4% to $260 million in the
quarter reflecting:
- a 3.2% increase from the favorable impact of foreign
exchange; and
- an 8.2% increase in organic net sales.
On an organic net sales basis, price/mix increased 7.9% and
volume increased 0.3%.
Operating profit for the segment decreased 12.1% to $24 million in the quarter primarily due to
certain non-cash restructuring charges. Adjusted operating profit
increased 57.8% to $42 million as the
benefits from higher organic net sales and productivity more than
offset the negative impact of cost of goods sold inflation,
unfavorable operating leverage, and higher SG&A.
Foodservice Segment First Quarter Results
Reported and organic net sales for the Foodservice segment
increased 5.2% to $289 million in the
quarter. Price/mix increased 10.3% and volume decreased 5.1%,
primarily from the elasticity impact of the company's
inflation-driven pricing actions.
Operating profit for the segment was $44
million compared to $1 million
in the prior year quarter. Adjusted operating profit increased
87.5% to $41 million in the quarter
as the benefits of higher organic net sales and productivity more
than offset the impacts of cost of goods sold inflation and
unfavorable operating leverage.
Other First Quarter Items
Corporate expenses decreased 56.0% to $37
million in the quarter and adjusted corporate expense
decreased 20.1% to $64 million in the
quarter driven primarily by lower incentive compensation compared
to the prior year quarter.
Pension and post-retirement non-service expense was $0 compared to $6
million of income in the prior-year period due primarily to
higher interest costs.
In the quarter, equity method investment earnings decreased
27.9% to $36 million as results from
the company's joint venture, Ardent Mills, reflected slightly lower
volume trends in the milling industry.
In the quarter, the effective tax rate was 23.5% compared to
(22.8%) in the prior-year period. The adjusted effective tax rate
was 23.6% compared to 22.9% in the prior-year period.
In the quarter, the company paid a dividend of $0.33 per share.
Outlook
The company is reiterating its fiscal 2024 outlook and providing
high-level drivers for the second quarter and back half of the
year. For the second quarter, the company is expecting a low-single
digit organic net sales decline as volume declines improve as
inflation-driven pricing actions from fiscal 2023 are wrapped. We
expect gross and operating margins to be below the first quarter
due to incremental trade and A&P investment. For the back half
of the year, the company is expecting low-single digit organic net
sales growth driven by year-over-year volume growth, along with
margins similar to Q2 as trade and A&P dollars remain
elevated.
The company's fiscal 2024 guidance reflects:
- Organic net sales growth is expected to be approximately 1.0%
compared to fiscal 2023
- Adjusted operating margin is expected to be between 16.0% and
16.5%
- Adjusted EPS is expected to be between $2.70 and $2.75
- Net Leverage Ratio of approximately 3.4x
- Capital expenditures of approximately $500M
- Interest expense of approximately $450M
- Adjusted effective tax rate of approximately 24%
- No pension income
- Ardent Mills contribution of approximately $150M
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 $0.67 EPS for the first quarter of fiscal 2024
(EPS amounts are rounded and after tax). Please see the
reconciliation schedules at the end of this release for additional
details.
- Approximately $0.04 per diluted
share of net expense related to restructuring plans
- Approximately $0.04 per diluted
share of net benefit related to corporate hedging derivative
gains
- Approximately $0.01 per
diluted share of net benefit related to rounding
The following are included in the ($0.16) EPS for the first quarter of
fiscal 2023 (EPS amounts are rounded and after tax).
Please see the reconciliation schedules at the end of this release
for additional details.
- Approximately $0.01 per diluted
share of net expense related to restructuring plans
- Approximately $0.04 per diluted
share of net expense related to impairment of businesses previously
held for sale
- Approximately $0.68 per diluted
share of net expense related to goodwill and brand impairment
charges
Please note that certain prior year amounts have been
reclassified to conform with current year presentation.
Discussion of Results
Conagra Brands will host a webcast and conference call at
9:30 a.m. Eastern time today to
discuss the results. The live audio webcast and presentation slides
will be available on www.conagrabrands.com/investor-relations under
Events & Presentations. The conference call may be accessed by
dialing 1-877-883-0383 for participants in the U.S. and
1-412-902-6506 for all other participants and using passcode
4734297. Please dial in 10 to 15 minutes prior to the call start
time. Following the company's remarks, the conference call will
include a question-and-answer session with the investment
community. A replay of the webcast will be available on
www.conagrabrands.com/investor-relations under Events &
Presentations until October 5,
2024.
About Conagra Brands
Conagra Brands, Inc. (NYSE: CAG), headquartered in Chicago, is one of North America's leading branded food
companies. Guided by an entrepreneurial spirit, Conagra Brands
combines a rich heritage of making great food with a sharpened
focus on innovation. The company's portfolio is evolving to satisfy
people's changing food preferences. Conagra's iconic brands, such
as Birds Eye®, Duncan Hines®, Healthy Choice®,
Marie Callender's®, Reddi-wip®, and Slim Jim®, as well as
emerging brands, including Angie's® BOOMCHICKAPOP®, Duke's®, Earth
Balance®, Gardein®, and Frontera®, offer choices for every
occasion. For more information, visit www.conagrabrands.com.
Note on Forward-Looking Statements
This document contains forward-looking statements within the
meaning of the federal securities laws. These forward-looking
statements are based on management's current expectations and are
subject to uncertainty and changes in circumstances. Readers of
this document should understand that these statements are not
guarantees of performance or results. Many factors could affect our
actual financial results and cause them to vary materially from the
expectations contained in the forward-looking statements, including
those set forth in this document. These risks, uncertainties, and
factors include, among other things: risks associated with general
economic and industry conditions, including inflation, rising
interest rates, decreased availability of capital, volatility in
financial markets, declining consumer spending rates, recessions,
decreased energy availability, increased energy costs (including
fuel surcharges), supply chain challenges, labor shortages, and
geopolitical conflicts (including the ongoing conflict between
Russia and Ukraine); negative impacts caused by public
health crises; 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, including any negative effects caused by changes in
levels of inflation and interest rates, weather conditions, health
pandemics or outbreaks of disease, actual or threatened hostilities
or war, or other geopolitical uncertainty; 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 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 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; 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.
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
Our fiscal 2024 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 Operations
|
(in
millions)
|
(unaudited)
|
|
|
|
FIRST
QUARTER
|
|
|
|
Thirteen Weeks
Ended
|
|
|
Thirteen Weeks
Ended
|
|
|
|
|
|
|
|
August 27,
2023
|
|
|
August 28,
2022
|
|
|
Percent
Change
|
|
Net sales
|
|
$
|
2,904.0
|
|
|
$
|
2,904.3
|
|
|
|
(0.0)
|
%
|
Costs and
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of goods
sold
|
|
|
2,080.9
|
|
|
|
2,184.0
|
|
|
|
(4.7)
|
%
|
Selling, general and
administrative expenses
|
|
|
334.1
|
|
|
|
741.6
|
|
|
|
(54.9)
|
%
|
Pension and
postretirement non-service expense (income)
|
|
|
0.3
|
|
|
|
(6.1)
|
|
|
|
N/A
|
|
Interest expense,
net
|
|
|
106.0
|
|
|
|
97.1
|
|
|
|
9.2
|
%
|
Income (loss) before
income taxes and equity method investment earnings
|
|
|
382.7
|
|
|
|
(112.3)
|
|
|
|
N/A
|
|
Income tax
expense
|
|
|
98.3
|
|
|
|
14.4
|
|
|
|
581.7
|
%
|
Equity method
investment earnings
|
|
|
35.5
|
|
|
|
49.2
|
|
|
|
(27.9)
|
%
|
Net income
(loss)
|
|
$
|
319.9
|
|
|
$
|
(77.5)
|
|
|
|
N/A
|
|
Less: Net income
attributable to noncontrolling interests
|
|
|
0.2
|
|
|
|
—
|
|
|
|
100.0
|
%
|
Net income (loss)
attributable to Conagra Brands, Inc.
|
|
$
|
319.7
|
|
|
$
|
(77.5)
|
|
|
|
N/A
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share - basic
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Conagra Brands, Inc.
|
|
$
|
0.67
|
|
|
$
|
(0.16)
|
|
|
|
N/A
|
|
Weighted average shares
outstanding
|
|
|
478.2
|
|
|
|
480.6
|
|
|
|
(0.5)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings (loss) per
share - diluted
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income (loss)
attributable to Conagra Brands, Inc.
|
|
$
|
0.67
|
|
|
$
|
(0.16)
|
|
|
|
N/A
|
|
Weighted average share
and share equivalents outstanding
|
|
|
479.8
|
|
|
|
480.6
|
|
|
|
(0.2)
|
%
|
Conagra Brands,
Inc.
|
Consolidated Balance
Sheets
|
(in
millions)
|
(unaudited)
|
|
|
|
August 27,
2023
|
|
|
May 28, 2023
|
|
ASSETS
|
|
|
|
|
|
|
|
|
Current
assets
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
93.3
|
|
|
$
|
93.9
|
|
Receivables, less
allowance for doubtful accounts of $3.8 and $3.8
|
|
|
971.5
|
|
|
|
965.4
|
|
Inventories
|
|
|
2,393.8
|
|
|
|
2,232.0
|
|
Prepaid expenses and
other current assets
|
|
|
114.9
|
|
|
|
93.7
|
|
Total current
assets
|
|
|
3,573.5
|
|
|
|
3,385.0
|
|
Property, plant and
equipment, net
|
|
|
2,914.6
|
|
|
|
2,773.8
|
|
Goodwill
|
|
|
11,178.2
|
|
|
|
11,178.2
|
|
Brands, trademarks and
other intangibles, net
|
|
|
3,192.4
|
|
|
|
3,205.9
|
|
Other assets
|
|
|
1,506.7
|
|
|
|
1,509.7
|
|
|
|
$
|
22,365.4
|
|
|
$
|
22,052.6
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
Notes
payable
|
|
$
|
513.1
|
|
|
$
|
641.4
|
|
Current installments
of long-term debt
|
|
|
1,015.4
|
|
|
|
1,516.0
|
|
Accounts and other
payables
|
|
|
1,534.6
|
|
|
|
1,529.4
|
|
Accrued
payroll
|
|
|
115.1
|
|
|
|
164.1
|
|
Other accrued
liabilities
|
|
|
761.9
|
|
|
|
589.8
|
|
Total current
liabilities
|
|
|
3,940.1
|
|
|
|
4,440.7
|
|
Senior long-term debt,
excluding current installments
|
|
|
7,745.1
|
|
|
|
7,081.3
|
|
Other noncurrent
liabilities
|
|
|
1,725.1
|
|
|
|
1,723.3
|
|
Total stockholders'
equity
|
|
|
8,955.1
|
|
|
|
8,807.3
|
|
|
|
$
|
22,365.4
|
|
|
$
|
22,052.6
|
|
Conagra Brands, Inc.
and Subsidiaries
|
Condensed Consolidated
Statements of Cash Flows
|
(in
millions)
|
(unaudited)
|
|
|
|
Thirteen Weeks
Ended
|
|
|
Thirteen Weeks
Ended
|
|
|
|
August 27,
2023
|
|
|
August 28,
2022
|
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
Net income
(loss)
|
|
$
|
319.9
|
|
|
$
|
(77.5)
|
|
Adjustments to
reconcile net income (loss) to net cash flows from operating
activities:
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
|
|
96.6
|
|
|
|
93.0
|
|
Asset impairment
charges
|
|
|
15.2
|
|
|
|
412.8
|
|
Equity method
investment earnings in excess of distributions
|
|
|
(6.7)
|
|
|
|
(27.8)
|
|
Stock-settled
share-based payments expense (benefit)
|
|
|
(2.7)
|
|
|
|
23.0
|
|
Contributions to
pension plans
|
|
|
(3.1)
|
|
|
|
(3.0)
|
|
Pension expense
(benefit)
|
|
|
2.8
|
|
|
|
(3.5)
|
|
Other items
|
|
|
10.4
|
|
|
|
(2.4)
|
|
Change in operating
assets and liabilities:
|
|
|
|
|
|
|
|
|
Receivables
|
|
|
(11.1)
|
|
|
|
78.7
|
|
Inventories
|
|
|
(161.8)
|
|
|
|
(289.7)
|
|
Deferred income taxes
and income taxes payable, net
|
|
|
90.6
|
|
|
|
3.8
|
|
Prepaid expenses and
other current assets
|
|
|
(35.6)
|
|
|
|
(17.4)
|
|
Accounts and other
payables
|
|
|
81.4
|
|
|
|
39.4
|
|
Accrued
payroll
|
|
|
(49.0)
|
|
|
|
(46.4)
|
|
Other accrued
liabilities
|
|
|
96.6
|
|
|
|
80.7
|
|
Net cash flows from
operating activities
|
|
|
443.5
|
|
|
|
263.7
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
Additions to property,
plant and equipment
|
|
|
(143.6)
|
|
|
|
(125.4)
|
|
Sale of property,
plant and equipment
|
|
|
0.2
|
|
|
|
2.0
|
|
Purchase of marketable
securities
|
|
|
(0.7)
|
|
|
|
(0.5)
|
|
Sale of marketable
securities
|
|
|
0.7
|
|
|
|
0.5
|
|
Other items
|
|
|
5.0
|
|
|
|
—
|
|
Net cash flows from
investing activities
|
|
|
(138.4)
|
|
|
|
(123.4)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
Issuances of
short-term borrowings, maturities greater than 90 days
|
|
|
43.5
|
|
|
|
—
|
|
Repayment of
short-term borrowings, maturities greater than 90 days
|
|
|
(54.8)
|
|
|
|
—
|
|
Net issuance
(repayment) of other short-term borrowings, maturities less than or
equal to 90 days
|
|
|
(117.0)
|
|
|
|
69.1
|
|
Issuance of long-term
debt
|
|
|
500.0
|
|
|
|
—
|
|
Repayment of long-term
debt
|
|
|
(504.3)
|
|
|
|
(10.7)
|
|
Debt issuance
costs
|
|
|
(2.8)
|
|
|
|
(4.0)
|
|
Repurchase of Conagra
Brands, Inc. common shares
|
|
|
—
|
|
|
|
(50.0)
|
|
Cash dividends
paid
|
|
|
(157.4)
|
|
|
|
(150.0)
|
|
Exercise of stock
options and issuance of other stock awards, including tax
withholdings
|
|
|
(13.7)
|
|
|
|
(8.3)
|
|
Other items
|
|
|
(0.6)
|
|
|
|
(0.5)
|
|
Net cash flows from
financing activities
|
|
|
(307.1)
|
|
|
|
(154.4)
|
|
Effect of exchange rate
changes on cash and cash equivalents
|
|
|
1.4
|
|
|
|
(1.8)
|
|
Net change in cash and
cash equivalents
|
|
|
(0.6)
|
|
|
|
(15.9)
|
|
Cash and cash
equivalents at beginning of period
|
|
|
93.9
|
|
|
|
83.3
|
|
Cash and cash
equivalents at end of period
|
|
$
|
93.3
|
|
|
$
|
67.4
|
|
Conagra Brands,
Inc.
|
Reconciliation of
Non-GAAP Financial Measures to Reported Financial
Measures
|
(in
millions)
|
|
Q1
FY24
|
|
Grocery &
Snacks
|
|
|
Refrigerated
&
Frozen
|
|
|
International
|
|
|
Foodservice
|
|
|
Total Conagra
Brands
|
|
Net
Sales
|
|
$
|
1,202.9
|
|
|
$
|
1,151.6
|
|
|
$
|
260.2
|
|
|
$
|
289.3
|
|
|
$
|
2,904.0
|
|
Impact of foreign
exchange
|
|
|
—
|
|
|
|
—
|
|
|
|
(7.4)
|
|
|
|
—
|
|
|
|
(7.4)
|
|
Organic Net
Sales
|
|
$
|
1,202.9
|
|
|
$
|
1,151.6
|
|
|
$
|
252.8
|
|
|
$
|
289.3
|
|
|
$
|
2,896.6
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year
change - Net Sales
|
|
|
1.2
|
%
|
|
|
(4.6)
|
%
|
|
|
11.4
|
%
|
|
|
5.2
|
%
|
|
|
(0.0)
|
%
|
Impact of foreign
exchange (pp)
|
|
|
—
|
|
|
|
—
|
|
|
|
(3.2)
|
|
|
|
—
|
|
|
|
(0.3)
|
|
Organic Net
Sales
|
|
|
1.2
|
%
|
|
|
(4.6)
|
%
|
|
|
8.2
|
%
|
|
|
5.2
|
%
|
|
|
(0.3)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Volume
(Organic)
|
|
|
(4.4)
|
%
|
|
|
(10.5)
|
%
|
|
|
0.3
|
%
|
|
|
(5.1)
|
%
|
|
|
(6.6)
|
%
|
Price/Mix
|
|
|
5.6
|
%
|
|
|
5.9
|
%
|
|
|
7.9
|
%
|
|
|
10.3
|
%
|
|
|
6.3
|
%
|
Q1
FY23
|
|
Grocery &
Snacks
|
|
|
Refrigerated
&
Frozen
|
|
|
International
|
|
|
Foodservice
|
|
|
Total Conagra
Brands
|
|
Net
Sales
|
|
$
|
1,188.3
|
|
|
$
|
1,207.6
|
|
|
$
|
233.5
|
|
|
$
|
274.9
|
|
|
$
|
2,904.3
|
|
Net sales from divested
businesses
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
Organic Net
Sales
|
|
$
|
1,188.3
|
|
|
$
|
1,207.6
|
|
|
$
|
233.5
|
|
|
$
|
274.9
|
|
|
$
|
2,904.3
|
|
Conagra Brands,
Inc.
|
Reconciliation of
Non-GAAP Financial Measures to Reported Financial
Measures
|
(in
millions)
|
|
Q1
FY24
|
|
Grocery &
Snacks
|
|
|
Refrigerated
&
Frozen
|
|
|
International
|
|
|
Foodservice
|
|
|
Corporate
Expense
|
|
|
Total Conagra
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 cost
(benefit)
|
|
|
—
|
|
|
|
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
|
%
|
Year-over-year % change
- Operating Profit
|
|
|
3.3
|
%
|
|
|
N/A
|
|
|
|
(12.1)
|
%
|
|
|
3,588.2
|
%
|
|
|
(56.0)
|
%
|
|
|
N/A
|
|
Year-over year % change
- Adjusted Operating Profit
|
|
|
3.8
|
%
|
|
|
14.7
|
%
|
|
|
57.8
|
%
|
|
|
87.5
|
%
|
|
|
(20.1)
|
%
|
|
|
21.6
|
%
|
Year-over-year bps
change - Operating Profit
|
|
44 bps
|
|
|
3,521 bps
|
|
|
(243) bps
|
|
|
1,482 bps
|
|
|
|
|
|
|
1,757 bps
|
|
Year-over-year bps
change - Adjusted Operating Profit
|
|
55 bps
|
|
|
294 bps
|
|
|
478 bps
|
|
|
619 bps
|
|
|
|
|
|
|
297 bps
|
|
Q1
FY23
|
|
Grocery &
Snacks
|
|
|
Refrigerated
&
Frozen
|
|
|
International
|
|
|
Foodservice
|
|
|
Corporate
Expense
|
|
|
Total
Conagra
Brands
|
|
Operating Profit
(loss)
|
|
$
|
250.4
|
|
|
$
|
(216.3)
|
|
|
$
|
26.9
|
|
|
$
|
1.2
|
|
|
$
|
(83.5)
|
|
|
$
|
(21.3)
|
|
Restructuring
plans
|
|
|
0.3
|
|
|
|
0.6
|
|
|
|
(0.1)
|
|
|
|
—
|
|
|
|
4.1
|
|
|
|
4.9
|
|
Impairment of
businesses held for sale
|
|
|
0.5
|
|
|
|
5.7
|
|
|
|
—
|
|
|
|
20.5
|
|
|
|
—
|
|
|
|
26.7
|
|
Acquisitions and
divestitures
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
0.1
|
|
|
|
0.1
|
|
Goodwill and brand
impairment charges
|
|
|
—
|
|
|
|
385.7
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
385.7
|
|
Municipal water break
costs
|
|
|
2.6
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
2.6
|
|
Corporate hedging
derivative losses (gains)
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(0.5)
|
|
|
|
(0.5)
|
|
Adjusted Operating
Profit
|
|
$
|
253.8
|
|
|
$
|
175.7
|
|
|
$
|
26.8
|
|
|
$
|
21.7
|
|
|
$
|
(79.8)
|
|
|
$
|
398.2
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Profit
Margin
|
|
|
21.1
|
%
|
|
|
(17.9)
|
%
|
|
|
11.5
|
%
|
|
|
0.4
|
%
|
|
|
|
|
|
|
(0.7)
|
%
|
Adjusted Operating
Profit Margin
|
|
|
21.4
|
%
|
|
|
14.5
|
%
|
|
|
11.5
|
%
|
|
|
7.9
|
%
|
|
|
|
|
|
|
13.7
|
%
|
Conagra Brands,
Inc.
|
Reconciliation of
Non-GAAP Financial Measures to Reported Financial
Measures
|
(in
millions)
|
|
Q1
FY24
|
|
Gross
profit
|
|
|
Selling, general
and administrative
expenses
|
|
|
Operating profit
1
|
|
|
Income
before
income
taxes
and equity method
investment
earnings
|
|
|
Income tax
expense
|
|
|
Income
tax rate
|
|
|
Net income
attributable to
Conagra Brands,
Inc.
|
|
|
Diluted EPS
from income
attributable to
Conagra Brands,
Inc
common
stockholders
|
|
Reported
|
|
$
|
823.1
|
|
|
$
|
334.1
|
|
|
$
|
489.0
|
|
|
$
|
382.7
|
|
|
$
|
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 cost
(benefit)
|
|
|
1.6
|
|
|
|
(3.3)
|
|
|
|
(1.7)
|
|
|
|
(1.7)
|
|
|
|
(0.4)
|
|
|
|
|
|
|
|
(1.3)
|
|
|
|
—
|
|
Rounding
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
(0.01)
|
|
Adjusted
|
|
$
|
801.4
|
|
|
$
|
258.4
|
|
|
$
|
484.3
|
|
|
$
|
378.0
|
|
|
$
|
97.4
|
|
|
|
23.6
|
%
|
|
$
|
315.9
|
|
|
$
|
0.66
|
|
% of Net
Sales
|
|
|
27.6
|
%
|
|
|
8.9
|
%
|
|
|
16.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year % of
net sales change - reported
|
|
|
354
bps
|
|
|
|
(1403)
bps
|
|
|
|
1,757
bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year % of
net sales change - adjusted
|
|
|
272
bps
|
|
|
|
(14)
bps
|
|
|
|
297
bps
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year-over-year
change - reported
|
|
|
14.3
|
%
|
|
|
(54.9)
|
%
|
|
|
N/A
|
|
|
|
N/A
|
|
|
|
581.7
|
%
|
|
|
|
|
|
|
N/A
|
|
|
|
N/A
|
|
Year-over-year
change - adjusted
|
|
|
10.9
|
%
|
|
|
(1.5)
|
%
|
|
|
21.6
|
%
|
|
|
23.0
|
%
|
|
|
19.3
|
%
|
|
|
|
|
|
|
15.0
|
%
|
|
|
15.8
|
%
|
Q1
FY23
|
|
Gross
profit
|
|
|
Selling,
general
and
administrative
expenses
|
|
|
Operating profit
(loss) 1
|
|
|
Income
(loss)
before
income
taxes and
equity
method
investment
earnings
|
|
|
Income tax
expense
|
|
|
Income
tax rate
|
|
|
Net income
(loss) attributable
to Conagra Brands, Inc.
|
|
|
Diluted EPS
from income
(loss)
attributable
to Conagra Brands,
Inc
common
stockholders 3
|
|
Reported
|
|
$
|
720.3
|
|
|
$
|
741.6
|
|
|
$
|
(21.3)
|
|
|
$
|
(112.3)
|
|
|
$
|
14.4
|
|
|
|
(22.8)
|
%
|
|
$
|
(77.5)
|
|
|
$
|
(0.16)
|
|
% of Net
Sales
|
|
|
24.8
|
%
|
|
|
25.5
|
%
|
|
|
(0.7)
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Restructuring
plans
|
|
|
0.2
|
|
|
|
4.7
|
|
|
|
4.9
|
|
|
|
4.9
|
|
|
|
1.2
|
|
|
|
|
|
|
|
3.7
|
|
|
|
0.01
|
|
Acquisitions and
divestitures
|
|
|
—
|
|
|
|
0.1
|
|
|
|
0.1
|
|
|
|
0.1
|
|
|
|
—
|
|
|
|
|
|
|
|
0.1
|
|
|
|
—
|
|
Corporate hedging
derivative losses (gains)
|
|
|
(0.5)
|
|
|
|
—
|
|
|
|
(0.5)
|
|
|
|
(0.5)
|
|
|
|
(0.1)
|
|
|
|
|
|
|
|
(0.4)
|
|
|
|
—
|
|
Advertising and
promotion expenses 2
|
|
|
—
|
|
|
|
61.9
|
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
|
|
—
|
|
|
|
—
|
|
Municipal water break
costs
|
|
|
2.6
|
|
|
|
—
|
|
|
|
2.6
|
|
|
|
2.6
|
|
|
|
0.6
|
|
|
|
|
|
|
|
2.0
|
|
|
|
—
|
|
Impairment of
businesses held for sale
|
|
|
—
|
|
|
|
26.7
|
|
|
|
26.7
|
|
|
|
26.7
|
|
|
|
6.6
|
|
|
|
|
|
|
|
20.1
|
|
|
|
0.04
|
|
Goodwill and brand
impairment charges
|
|
|
—
|
|
|
|
385.7
|
|
|
|
385.7
|
|
|
|
385.7
|
|
|
|
58.9
|
|
|
|
|
|
|
|
326.8
|
|
|
|
0.68
|
|
Adjusted
|
|
$
|
722.6
|
|
|
$
|
262.5
|
|
|
$
|
398.2
|
|
|
$
|
307.2
|
|
|
$
|
81.6
|
|
|
|
22.9
|
%
|
|
$
|
274.8
|
|
|
$
|
0.57
|
|
% of Net
Sales
|
|
|
24.9
|
%
|
|
|
9.0
|
%
|
|
|
13.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1 Operating
profit is derived from taking Income from continuing operations
before income taxes and equity method investment earnings, adding
back Interest expense, net and removing Pension and postretirement
non-service income.
|
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.
|
3 In Q1
FY23, we reported a GAAP net loss. In periods when we recognize a
net loss, we exclude the impact of outstanding stock awards from
the diluted loss per share calculation, as their inclusion would
have an anti-dilutive effect. The adjusted diluted earnings per
share calculation includes the impact of outstanding stock
awards.
|
Conagra Brands,
Inc.
|
Reconciliation of
Non-GAAP Financial Measures to Reported Financial
Measures
|
(in
millions)
|
|
|
|
August 27,
2023
|
|
|
August 28,
2022
|
|
|
%
Change
|
|
Net cash flows from
operating activities
|
|
$
|
443.5
|
|
|
$
|
263.7
|
|
|
|
68.2
|
%
|
Additions to property,
plant and equipment
|
|
|
(143.6)
|
|
|
|
(125.4)
|
|
|
|
14.5
|
%
|
Free cash
flow
|
|
$
|
299.9
|
|
|
$
|
138.3
|
|
|
|
116.8
|
%
|
|
|
Q1
FY24
|
|
|
Q1
FY23
|
|
Notes
payable
|
|
$
|
513.1
|
|
|
$
|
253.4
|
|
Current installments of
long-term debt
|
|
|
1,015.4
|
|
|
|
1,204.7
|
|
Senior long-term debt,
excluding current installments
|
|
|
7,745.1
|
|
|
|
7,584.1
|
|
Total
Debt
|
|
$
|
9,273.6
|
|
|
$
|
9,042.2
|
|
Less: Cash
|
|
|
93.3
|
|
|
|
67.4
|
|
Net
Debt
|
|
$
|
9,180.3
|
|
|
$
|
8,974.8
|
|
|
|
Q1
FY24
|
|
Net
Debt1
|
|
$
|
9,180.3
|
|
|
|
|
|
|
Net income
attributable to Conagra Brands, Inc.
|
|
$
|
1,080.8
|
|
Add Back: Income tax
expense
|
|
|
302.6
|
|
Income tax expense
attributable to noncontrolling interests
|
|
|
(0.5)
|
|
Interest expense,
net
|
|
|
418.5
|
|
Depreciation
|
|
|
318.0
|
|
Amortization
|
|
|
55.5
|
|
Earnings before
interest, taxes, depreciation, and amortization
(EBITDA)
|
|
$
|
2,174.9
|
|
Restructuring
plans2
|
|
|
28.4
|
|
Acquisitions and
divestitures
|
|
|
8.5
|
|
Corporate hedging
derivative gains
|
|
|
10.0
|
|
Goodwill and brand
impairment charges3
|
|
|
343.6
|
|
Legal
matters
|
|
|
3.8
|
|
Fire related
costs
|
|
|
11.7
|
|
Municipal water break
costs
|
|
|
0.9
|
|
Third-party vendor
cybersecurity incident
|
|
|
4.4
|
|
Adjusted
EBITDA
|
|
$
|
2,586.2
|
|
|
|
|
|
|
Net Debt to Adjusted
EBITDA4
|
|
|
3.55
|
|
|
1 As of
August 27, 2023.
|
2 Excludes
comparability items related to depreciation.
|
3 Excludes
comparability items attributable to noncontrolling
interests.
|
4 The
company defines its net debt leverage ratio as net debt divided by
adjusted EBITDA for the trailing twelve month period.
|
Conagra Brands,
Inc.
|
Reconciliation of
Non-GAAP Financial Measures to Reported Financial
Measures
|
(in
millions)
|
|
|
|
Q1
FY24
|
|
|
Q1
FY23
|
|
|
%
Change
|
|
Net income (loss)
attributable to Conagra Brands, Inc.
|
|
$
|
319.7
|
|
|
$
|
(77.5)
|
|
|
|
N/A
|
|
Add Back: Income tax
expense
|
|
|
98.3
|
|
|
|
14.4
|
|
|
|
|
|
Income tax expense
attributable to noncontrolling interests
|
|
|
—
|
|
|
|
—
|
|
|
|
|
|
Interest expense,
net
|
|
|
106.0
|
|
|
|
97.1
|
|
|
|
|
|
Depreciation
|
|
|
83.1
|
|
|
|
78.2
|
|
|
|
|
|
Amortization
|
|
|
13.5
|
|
|
|
14.8
|
|
|
|
|
|
Earnings before
interest, taxes, depreciation, and amortization
|
|
$
|
620.6
|
|
|
$
|
127.0
|
|
|
|
388.7
|
%
|
Restructuring
plans1
|
|
|
21.0
|
|
|
|
4.9
|
|
|
|
|
|
Acquisitions and
divestitures
|
|
|
0.2
|
|
|
|
0.1
|
|
|
|
|
|
Corporate hedging
derivative losses (gains)
|
|
|
(27.6)
|
|
|
|
(0.5)
|
|
|
|
|
|
Fire related cost
(benefit)
|
|
|
(1.7)
|
|
|
|
—
|
|
|
|
|
|
Municipal water break
costs
|
|
|
—
|
|
|
|
2.6
|
|
|
|
|
|
Impairment of
businesses held for sale
|
|
|
—
|
|
|
|
26.7
|
|
|
|
|
|
Goodwill and brand
impairment charges
|
|
|
—
|
|
|
|
385.7
|
|
|
|
|
|
Adjusted Earnings
before interest, taxes, depreciation, and
amortization
|
|
$
|
612.5
|
|
|
$
|
546.5
|
|
|
|
12.1
|
%
|
|
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.