Conagra Brands Q1 Results Miss Estimates; Reaffirms FY25 Outlook

ConAgra Foods

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(RTTNews) - Branded food company Conagra Brands, Inc. (CAG) reported Wednesday that profit for the first quarter surged 46 percent from last year, reflecting an income tax benefit, despite a slight decline in net sales and gross margin. However, adjusted earnings per share and quarterly revenues missed analysts' estimates. The company reaffirmed its outlook for the full-year 2025, reflecting confidence in the underlying momentum of its business.

In the pre-market trading on Wednesday, Conagra is on the NYSE at $30.00, down $2.72 or 8.31 percent.

For the first quarter, net income attributable to Conagra increased to $466.8 million or $0.97 per share from $319.7 million or $0.67 per share in the prior-year quarter, driven primarily by an income tax benefit of $210.4 million.

Excluding one-time items, adjusted net earnings were $0.53 per share, compared to $0.66 per share in the year-ago quarter.

On average, 15 analysts polled by Thomson Reuters expected the company to report earnings of $0.59 per share for the quarter. Analysts' estimates typically exclude special items.

Net Sales for the quarter declined 3.8 percent to $2.79 billion from $2.90 billion in the same quarter last year. Analysts expected revenues of $2.84 billion for the quarter.

Organic sales decreased 3.5 percent, driven by a 1.9 percent negative impact from price/mix, largely driven by the company's strategic investments in the quarter, and a 1.6 percent decrease in volume.

The company also estimates that results in the quarter were impacted by approximately $27 million due to temporary manufacturing disruptions in the Hebrew National business during the key grilling season.

Net sales for the Grocery & Snacks segment declined 1.7 percent to $1.2 billion, net sales for the Refrigerated & Frozen segment decreased 5.7 percent to $1.1 billion, net sales for the International segment edged down 0.4 percent to $259 million and net sales for the Foodservice segment decreased 7.8 percent to $267 million from last year.

Gross profit decreased 189 basis points to 26.5 percent, and adjusted gross margin decreased 163 basis points to 26.0 percent as higher productivity was more than offset by the negative impacts of lower organic net sales.

Looking ahead to fiscal 2025, the company continues to project adjusted earnings in a range of $2.60 to $2.65 per share on organic net sales between a decline of 1.5 percent and flat.

The Street is looking for earnings of $2.61 per share on a revenue decline of 0.7 percent to $11.97 billion for the year.

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