On July 11, 2024, Conagra Brands Inc (CAG, Financial) released its 8-K filing detailing the financial results for the fourth quarter and full fiscal year 2024, which ended on May 26, 2024. Conagra Brands is a leading packaged food company in the United States, known for its popular brands such as Marie Callender's, Healthy Choice, Banquet, Birds Eye, Duncan Hines, Hunt's, Slim Jim, and many others.
Performance Overview
Conagra Brands Inc (CAG, Financial) reported a net sales decrease of 2.3% to $2.9 billion for the fourth quarter, driven by a 0.6% negative impact from price/mix and a 1.8% decrease in volume. Despite these challenges, the company achieved an adjusted earnings per share (EPS) of $0.61, surpassing the analyst estimate of $0.57. For the full fiscal year, net sales decreased by 1.8% to $12.1 billion, while adjusted EPS decreased by 3.6% to $2.67, still above the annual estimate of $2.50.
Financial Achievements
Conagra Brands Inc (CAG, Financial) demonstrated significant financial achievements despite market headwinds. The company's gross profit for the fourth quarter was $805 million, with an adjusted gross profit of $803 million, remaining flat compared to the prior year. The gross margin increased by 135 basis points to 27.7%, and the adjusted gross margin increased by 62 basis points to 27.6%. These improvements were attributed to higher productivity and supply chain initiatives.
Segment Performance
The Grocery & Snacks segment saw a 2.1% decrease in net sales to $1.2 billion, driven by a 1.5% increase in price/mix and a 3.6% decrease in volume. The Refrigerated & Frozen segment experienced a 3.8% decrease in net sales to $1.2 billion, with a 4.7% decrease in price/mix and a 0.9% increase in volume. The International segment reported a 6.4% increase in net sales to $267 million, while the Foodservice segment saw a 3.9% decrease in net sales to $291 million.
Income Statement Highlights
| Metric | Q4 FY24 | Q4 FY23 | Change |
|---|---|---|---|
| Net Sales | $2,905.9 million | $2,973.3 million | (2.3)% |
| Gross Profit | $805 million | $803 million | Flat |
| Net Income (Loss) | $(567.2) million | $36.3 million | N/A |
| Adjusted EPS | $0.61 | $0.08 | N/A |
Balance Sheet and Cash Flow
Conagra Brands Inc (CAG, Financial) ended the fiscal year with net debt of $8.4 billion, representing an 8.5% reduction compared to the prior year. The company generated $2.0 billion in net cash flows from operating activities, a significant increase from $995 million in the previous year. Free cash flow improved by 157% to $1.6 billion, and capital expenditures were $388 million.
CEO Commentary
"Our investments in our brands continued to yield results, and again drove volume improvement in our Domestic Retail business. Progress was most notable in our key Frozen and Snacks domains, where we also saw market share gains. Additionally, our supply chain productivity initiatives enabled us to expand adjusted gross margins, and we continued to strengthen the balance sheet and reduce our net leverage ratio," said Sean Connolly, president and chief executive officer of Conagra Brands.
Outlook
Looking ahead to fiscal 2025, Conagra Brands Inc (CAG, Financial) expects organic net sales to range from a decrease of 1.5% to flat compared to fiscal 2024. The company anticipates an adjusted operating margin between 15.6% and 15.8%, and adjusted EPS between $2.60 and $2.65. Free cash flow conversion is expected to be around 90%, with continued cost of goods sold inflation projected at roughly 3%.
For more detailed information, please refer to the full 8-K filing.
Explore the complete 8-K earnings release (here) from Conagra Brands Inc for further details.
