Conagra Brands Inc (NYSE: CAG) reported better-than-anticipated fiscal 2023 first quarter results. Furthermore, the processed food manufacturer reconfirmed its FY 2023 outlook. The stock of Conagra closed Thursday’s trading session at $32.56, down $1.24 or 3.67% from its former close.
Chicago, Illinois-based Conagra reported first-quarter returns of $2.90 billion, up 9.50% from $2.65 billion in the comparable quarter of the previous year. The increase in sales reflects a negative currency exchange impact of 0.20% and a 9.70% rise in organic sales.
For the quarter that ended August 28, 2022, the firm posted a net loss of $77.50 million, or $0.16 per share, compared with a net profit of $235.40 million, or $0.49 per share, in the quarter that ended August 29, 2021.
Excluding restructuring plans, acquisitions and divestitures, municipal water break costs, impairment of business held for sale, and goodwill and brand impairment charges, among others, the company recorded a 1Q 2023 adjusted net income of $274.8 million, or $0.57 per share, an increase from $240.50 million, or $0.50 per share, in 1Q 2022.
Experts surveyed by FactSet had projected the company to report earnings of $0.52 per share on incomes of $2.85 billion. Remarking on the results, Sean Connolly, president and CEO of Conagra Brands, said, “The strength of our brands and continued execution of the Conagra Way playbook resulted in strong sales and adjusted operating profit during the first quarter.”
Segment wise,
- Grocery & Snacks revenues grew by 10.50% y-o-y to $1.188 billion.
- Refrigerated & Frozen revenues were $1.207 billion, up 9.60% from last year.
- International revenues were $233.50 million, down 1.30% on a year-over-year basis.
- Foodservice revenues surged 14.60% y-o-y to $274.90 million.
The firm ended the first quarter with cash and cash equivalents of $67.40 million, down from $83.30 million in the prior quarter.
Looking forward, the company stated that it continues to expect FY 2023 net sales growth of between 4% and 5% compared with FY 2022. Also, Conagra continues to project an adjusted operating margin of roughly 15% and adjusted EPS growth in the range of between 1% and 5% compared with FY 2022.
The quarterly earnings beat and the reaffirmation of the FY 2023 sales outlook are expected to keep the stock of Conagra range-bound in the short term.
Technically, the stock of Conagra is decreasing after facing resistance at 35. The subsequent support is estimated only near 31.50. Also, the stock is trading below its 50-day moving average while the MACD indicator is displaying a negative reading. Consequently, we predict the stock to continue in a downtrend in the short term.
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