Conagra Brands reports solid 2022 first-quarter results; foodservice organic sales rise 21%

Oct. 11, 2021

Food giant Conagra Brands Inc. (NYSE: CAG) reported results for the first quarter of fiscal year 2022, which ended on Aug. 29, 2021, with a 1%  net sales decrease to $2.7 billion.

Conagra said the decline in net sales primarily reflects a 1.1% net decrease from the divestitures of the H.K. Anderson, Egg Beaters and the Peter Pan peanut butter business. Also contributing to the decline were a 0.5% increase from the favorable impact of foreign exchange and the 0.4% decrease in organic net sales.

Conagra's net sales for the foodservice segment increased 20.9% to $240 million in the quarter, reflecting a 21.7% increase in organic net sales and an 0.8% decrease from the impact of the sold businesses mention above.

On an organic net sales basis, volume increased 20.1% as restaurant traffic continued to recover from the impacts of the COVID-19 pandemic. Price/mix was favorable at 1.6% in the quarter primarily driven by inflation-justified pricing.

Operating profit for Conagra's foodservice segment decreased 20.1% to $20 million and adjusted operating profit decreased 19% to $21 million in the quarter. Conagra said the impacts of cost of goods sold inflation more than offset the benefits of higher organic net sales and favorable supply chain realized productivity.


  • First-quarter net sales decreased 1%; organic net sales decreased 0.4%. On a two-year compounded annualized basis, fiscal 2022 first quarter net sales increased 5.3% and organic net sales increased 7%.
  • Operating margin decreased 534 basis points to 13.7%; adjusted operating margin decreased 604 basis points to 14.1%.
  • Diluted earnings per share from continuing operations (EPS) for the first quarter decreased 26.9% to $0.49, and adjusted EPS decreased 28.6% to $0.50. On a two-year compounded annualized basis, first quarter EPS increased 16.6% and adjusted EPS increased 7.8%.
  • During the first quarter, the company repurchased approximately 1.5 million shares of its common stock for approximately $50 million.
  • The company is reaffirming its fiscal 2022 adjusted EPS guidance and updating its expected path to achieving that guidance. The company's updated fiscal 2022 guidance is as follows:
    • Organic net sales growth is expected to be approximately +1% versus prior guidance of approximately flat
    • Gross inflation (input cost inflation before the impacts of hedging) is expected to be approximately 11% versus prior guidance of approximately 9%.
    • Adjusted operating margin is expected to be approximately 16%, representing no change to prior guidance.
    • Adjusted EPS is expected to be approximately $2.50, representing no change to prior guidance.


[Credit: Conagra Brands]
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