In an April 4th 2024 release, Conagra Brands (CAG) posted financial results for the third quarter of Fiscal 2024 ending February 23rd 2024. The Company can be regarded as representative of the manufacturing and packaged food sector with competitors including Post Holdings, Campbell Soup Company and Kraft-Heinz, all currently under pressure to reduce prices to the major food service providers and supermarket chains. In an inflationary environment consumers are turning to less expensive private brands although the trend to eat-at-home may benefit Conagra Brands and competitors.
For the third quarter of FY 2024, net income was $308.6 million on net revenue of $3,033 million with a diluted EPS of $0.64. Comparable figures for the third quarter of FY 2023 ending February 26th 2023 were net income of $342.2 million on net revenue of $3,087 million with a diluted EPS of $0.72
The release included results for the four operating segments:-
- Foodservice: Operating profit of $35 million down 48.7 percent from Q3 2023, on revenue of $273 million
- Refrigerated and Frozen: Operating profit of $202 million, down 24 percent, on revenue of $1,200 million
- International: Operating profit of $42 million, up 14 percent on revenue of $272 million
- Groceries and Snacks: Operating profit of $299 million, up 16 percent on revenue of $1,300 million
For the third quarter of FY 2024 (with the values for the corresponding quarter of FY 2023 in parentheses) Conagra achieved a gross margin of 28.3 percent (27.2) and an operating margin of 15.6 percent (15.9). Revenue was down 1.8 percent.
Guidance for FY 2024 included a net sales decline of 1 to 2 percent; an adjusted increase in operating margin of 15.8 percent and an EPS of between $2.60 and $2.65. Capital expenditure was projected at $425 million.
Conagra Brands listed assets of $21,919 million, including a disproportionate $14,261 million as goodwill and intangibles, against long-term debt and other obligations of $9,221 million. The Company had an intraday market capitalization of $14,230 million on April 16th. CAG trades with a forward P/E of 10.9 and has ranged over a 52-week period from $25.16 to $38.75 with a 50-day moving average of $28.69. Twelve-month trailing operating and profit margins were 17.7 percent and 7.9 percent respectively. The Company generated a twelve-month trailing return of 5.3 percent on assets and 10.5 percent on equity.