Conagra's second-quarter net sales rise 2.1% to $3.1 billion, but margins drop almost 15%

Jan. 12, 2022

Slim Jim-maker Conagra Brands Inc. (NYSE: CAG) last week released financial results for its second quarter of fiscal year 2022, ended Nov. 28, 2021, showing sales up slightly and profits dipping.

Key points:

  • Second-quarter net sales increased 2.1%; organic net sales increased 2.6%. On a two-year compounded annualized basis, fiscal 2022 second quarter net sales increased 4.1% and organic net sales increased 5.3%.
  • Operating margin decreased 435 basis points to 13.4%; adjusted operating margin decreased 500 basis points to 14.6%.
  • Diluted earnings per share (EPS) for the second quarter decreased 26.0% to $0.57, and adjusted EPS decreased 21% to $0.64. On a two-year compounded annualized basis, second quarter EPS increased 3.7% and adjusted EPS increased 0.8%.
  • The company is reiterating its adjusted EPS guidance for fiscal 2022 and updating its organic net sales and adjusted operating margin guidance to reflect continued top line strength, higher inflation expectations, and the timing of additional pricing actions.
  • The company's updated fiscal 2022 guidance is targeting organic net sales to be approximately +3%, versus prior guidance of approximately +1. Gross inflation (input cost inflation before the impacts of hedging and other sourcing benefits) is expected to be approximately 14%, versus prior guidance of approximately 11%.
  • Net sales for Conagra's foodservice segment increased 14.9% to $246 million.


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