Vending

Conagra Brands reports mixed Q4 and FY 2022 results

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July 14, 2022

Conagra Brands Inc. reported mixed results for Q4 and FY 2022, suffering losses despite improved sales.

The benefits from supply chain realized productivity, higher organic net sales, lower COVID-19 pandemic-related expenses and cost synergies associated with the Pinnacle Foods acquisition were not enough to offset the impacts from cost of goods sold inflation of 16.4%, the lost profit from the sold businesses and elevated supply chain operating costs. Highlights included:

• Net sales increased 6.2% from $2.74 billion in Q4 2021 to $2.9 billion in the quarter ending May 29, 2022. A 6.8% increase in organic net sales was driven by a 13.2% improvement in price/mix, which was partially offset by a 6.4% decrease in volume.
• Net income declined 49.1% from $309.9 million to $157.7 million in the comparative quarters.
• Basic and diluted EPS fell 48.4% from 64 cents to 33 cents while adjusted EPS increased 20.4% to 65 cents.
• Reported and organic net sales for the grocery and snacks segment increased 7.2% to $1.2 billion in the quarter.
• Net sales for the refrigerated and frozen segment increased 3.4% to $1.2 billion.
• Net sales for the foodservice segment increased 21.5% to $287 million.
• Net sales for the international segment increased 0.9% to $231 million.
• For the full year, net sales increased 3.1% from $11.18 billion to $11.5 billion and organic net sales increased 3.8%. On a two-year compounded annualized basis, fiscal 2022 net sales increased 2.1% and organic net sales increased 4.4%.
• Net income fell 31.7% from $1.3 billion to $888.2 million in the comparative years.
• Basic EPS fell 30.7% from $2.67 to $1.85 for the year while diluted EPS fell 30.8% from $2.66 to $1.84.

For 2023, the company expects organic sales growth of 4% to 5% over fiscal 2022, while adjusted EPS will grow 1% to 5% over fiscal 2022.

Shares traded at $32.75 today against a 52-week range of $30.06 to $36.97.

The $2.91 billion in quarterly revenue missed analyst expectations by $20 million while the non-GAAP EPS of 65 cents beat expectations by 2 cents, according to Seeking Alpha.

"Throughout fiscal 2022 our team took decisive actions to offset inflation and invest in our business. I'm pleased that our brands continued to resonate with consumers, and we continued to grow share," Sean Connolly, president and CEO said in the press release.