Conagra Brands’ net sales increased 15% in the first quarter of the fiscal year.
Adjusted EBITDA increased 34.5% in the final quarter.
Conagra forecasts up to 57 pence of adjusted diluted EPS in the second quarter.
Conagra Brands Inc. (NYSE: CAG) said Thursday that its organic net sales increased 15% YoY in the first quarter of the fiscal year. The company attributed the increase to annualized volume growth of 10.9%. Analysts had predicted that the company would see much lower organic net sales growth of 10.9% in the final quarter.
Conagra’s sales in the foodservice sector fell by 21.8%.
Conagra generated net sales of £880 million from its food and snackfood business, representing 16% growth over the same quarter last year. Sales from the chilled and frozen food segment were also 17.9% higher than in the previous year at £880 million. In an announcement earlier this week, Utz Brands announced plans to purchase the HK Anderson brand (peanut butter filled pretzel) from Conagra for less than £7.75 million.
International sales also increased by 7.2% to £169.94 million in the first quarter, offset by a massive 21.8% decline in foodservice sales to £151.40 million. In the previous quarter (Q4), the US company had recorded a net profit of £163.86 million according to the report published at the end of June.
The U.S. packaged food company also reported a 244 basis point increase in adjusted gross margin to 20.7% on Thursday. At £502.07, it said its Adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) increased 34.5% in the last quarter.
Conagra’s forecast for the second quarter
For the second quarter of the fiscal year, the Chicago-based company now forecasts organic net sales growth of up to 8%. It expects its adjusted diluted earnings per share to fall within a range of 54 to 57 pence. In contrast, analysts are forecasting Conagra’s adjusted diluted earnings per share in the second quarter to be 55 pence. Its board also announced on Thursday a 29% increase in the quarterly cash dividend.
It was reported that Conagra Brands traded 1.5% higher in pre-trade trading on Thursday. However, the company’s shares slipped about 5% in the open market, reaching an intraday low of £26.93 per share. Conagra is now exchanging hands near the same level at which it started the year 2020. In March, the COVID 19 restrictions weighed on the company’s performance and pushed the share price down to £18.73 per share.
In comparison, Conagra performed quite well in the stock market last year, with an annual profit of around 50%. At the time of writing this article, it is valued at £13.18 billion and has a price-earnings ratio of 20.22.