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Shares of Conagra Manufacturers Inc. (NYSE: CAG) had been up barely on Friday, a day after the corporate delivered better-than-expected outcomes for its first quarter of 2023. The inventory has dropped 3% year-to-date. The corporate continued to realize market share and the highest line benefited from pricing through the first quarter. Nonetheless, volumes are anticipated to be impacted by pricing in Q2.
Higher-than-expected numbers
Web gross sales elevated 9.5% to $2.9 billion in Q1 2023 in comparison with the year-ago interval, surpassing projections. Natural web gross sales elevated 9.7%. The highest line progress was primarily pushed by pricing actions taken to fight inflation. Adjusted EPS rose 14% to $0.57 and exceeded estimates. Gross revenue elevated 7% to $720 million however gross margin dropped 58 foundation factors to 24.8%.
Class efficiency
Conagra recorded gross sales progress throughout most of its segments through the first quarter helped by pricing. Nonetheless, volumes declined because of the worth will increase. Complete retail gross sales grew 9% YoY in Q1 and the corporate continued to realize market share with the strongest features within the Frozen and Snacks classes.
Retail gross sales within the Frozen class grew 8% YoY, with strong features from plant-based protein, breakfast sausages, and single-serve meals. Breakfast sausages witnessed the best progress at 19.5% adopted by plant-based protein at 13.2%. Single-serve meals elevated over 11% indicating clients’ choice for handy choices.
Retail gross sales for Snacks elevated 13%, with the best progress coming from microwave popcorn that elevated 21.7%. This was adopted by meat snacks which had been up almost 16% within the quarter. The Staples class noticed retail gross sales progress of 8%, pushed by single-serve dinners and entrees, toppings, pickles and canned tomatoes.
Outlook
Conagra expects provide chain headwinds to proceed because the working atmosphere stays risky. These disruptions, together with current pricing actions, are anticipated to impression volumes through the second quarter of 2023. The corporate expects gross inflation to proceed however average by means of the rest of the fiscal yr.
For FY2023, natural web gross sales are anticipated to develop 4-5% whereas adjusted EPS is estimated to extend 1-5% in comparison with final yr. Adjusted working margin is predicted to be approx. 15%. Capex is predicted to be approx. $500 million.
Click on right here to learn the complete transcript of Conagra Manufacturers’ Q1 2023 earnings convention name
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