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Shares of Conagra Manufacturers, Inc. (NYSE: CAG) had been down 2% on Thursday after the corporate reported blended outcomes for the second quarter of 2024. The branded meals vendor additionally lowered its steering for the complete 12 months on the idea of year-to-date outcomes and slower quantity restoration. Listed below are the important thing takeaways from the earnings report:
Gross sales miss, earnings beat
Conagra reported internet gross sales of $3.21 billion for the second quarter of 2024, which was down 3.2% from the identical interval final 12 months and beneath analysts’ projections of $3.24 billion. Natural gross sales had been down 3.4%. GAAP internet revenue decreased 25% year-over-year to $286 million, or $0.60 per share. Adjusted EPS fell 12% to $0.71 however surpassed estimates of $0.68.
Class efficiency
In Q2, Conagra’s natural gross sales decline was pushed by a 2.9% drop in quantity, primarily on account of decrease consumption tendencies. Volumes throughout the Grocery & Snacks and Refrigerated & Frozen segments had been impacted by decrease consumption tendencies resulting in declines of three.7% and three.3%, respectively.
Gross sales decreased 4.1% within the Grocery & Snacks section and 5.8% within the Refrigerated & Frozen section in Q2. Nonetheless, the corporate gained greenback share in snacking and staples classes equivalent to microwave popcorn, chili, and sizzling cocoa in addition to classes like frozen sides and frozen breakfast.
Gross sales within the Worldwide and Foodservice segments elevated 8% and 4% respectively, with the Worldwide section benefiting from quantity development of three.3%, pushed by sturdy efficiency within the Mexico enterprise. The Foodservice section noticed worth/combine enhance by 6.8%, fueled by inflation-driven pricing actions, however volumes dropped 2.5%.
Lowered outlook
Conagra lowered its outlook for natural gross sales development and adjusted EPS for the complete 12 months of 2024. The revised steering displays year-to-date efficiency, expectations for a slower quantity restoration, and elevated model investments through the latter half of the 12 months. The corporate now expects natural gross sales to lower 1-2% in comparison with FY2023, versus its earlier expectation for a development of approx. 1%. Adjusted EPS is now anticipated to vary between $2.60-2.65 versus the prior vary of $2.70-2.75.
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