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Conagra Brands Posts Q2 Financial Results

01/06/2022

In a January 6th release, Conagra Brands Inc. (CAG) posted financial results for the second quarter of fiscal 2022 ending November 28th 2020. This Company can be regarded as a bellwether for the food manufacturing industry subject to increased costs of ingredients, labor, packaging and transport in a consumer environment still restrained by COVID.

 

For the period, net revenue was $275.5 million on total revenue of $3,059 million.  Comparable figures for the second quarter of fiscal 2021 ending November 29th 2020 were net income of $378.9 million on total revenue of $2,995 million.  EPS declined from $0.77 for the second quarter of fiscal 2021 to $0.57 for the most recent quarter. A 9.4 percent increase in cost of goods sold detracted from profit.

All four business segments posted declines in operating profit compared to Q2 of FY 2021:-

  • Grocery and Snacks: Down 21.2 percent to $249 million.
  • Refrigerated and Frozen: Down 36.3 percent to $168 million.
  • International: Down 5.8 percent to $37 million.
  • Food Service: Down 39.1percent to $14 million.

 

Sean Connolly, president and CEO of Conagra Brands, commented, "Our business delivered another quarter of strong net sales growth as we continued to experience elevated levels of demand across our portfolio. Our focus on strategic innovation and our intentional approach to investment helped us maintain brand momentum in the second quarter and continue capturing share across each of our domains – frozen, snacks, and staples." He continued, "Looking ahead, we expect to continue experiencing cost pressures above original expectations in the second half of fiscal 2022. However, we believe the sustained elevated consumer demand coupled with the mitigating actions we have successfully executed, and will continue executing, put us on track to overcome these near-term challenges, improve margins in the back half of the fiscal year, and deliver on our profit plan."

 

Conagra Brands posted assets of $7,168 million, less intangibles and goodwill amounting to $15,424 million, against long-term debt and lease obligations of $10,558 million. The Company has an intraday market capitalization of $15,339 million. CAG trades with a forward P/E of 13.0 and has ranged over a 52-week period from $30.44 to $39.09 with a 50-day moving average of $32.55.  Twelve-month trailing operating margin was 17.0 percent and profit margin 10.8 percent.  Return on assets over the past twelve months was 5.3 percent and the return on equity 14.3 percent. At close of trading January 5th pre-release, CAG was priced at $34.15. At market close, post-release on January 6th CAG traded at at $33.53 down 1.8 percent.