Conagra Net Income Jumps 83.1% In Second Quarter

Conagra Brands (NYSE: CAG) issued results today for its second quarter ended November 26th, 2017. 

Total net sales increased 4.1% in the quarter to $2.17 billion from $2.09 billion in the same quarter a year ago. Net income attributable to Conagra shareholders increased 83.1% to $223.5 million, and earnings per share increased 96.4% to $0.55 from $0.28 in the respective periods. Adjusted diluted earnings per share, which removes the effects of impairments and other one-time items, increased 12.2% from $0.49 per share in the second quarter a year ago to $0.55 per share in the most recent period.

Net sales growth, lower interest expense, and fewer shares outstanding drove improvements in earnings per share.

During the quarter, the company closed the acquisition of Angie’s Artisan Treats, maker of Angie’s BOOMCHICKAPOP ready-to-eat popcorn, for approximately $250 million.
The company provided an outlook for 2018 that includes organic sales growth to be on the high range of -2% to flat, net sales growth of -1% to 1.5%, and adjusted diluted earnings per share on the high end of $1.84 to $1.89. The company continues to expect to repurchase approximately $1.1 billion of common shares in the fiscal year.

Sean Connolly, President and CEO of Conagra Brands, commented, “One year after becoming a pure-play, branded food company, Conagra is growing again. Our work to upgrade the quality of our revenue base and rebuild our innovation pipeline is bearing fruit, particularly in our frozen business, where we put much of our year-one focus. Better than expected top-line performance through the second quarter is enabling us to invest more in our U.S. retail business to enhance distribution, merchandising, and consumer trial of our brands – especially where we have new renovation or innovation. Accordingly, we are updating our fiscal 2018 organic net sales and EPS guidance to near the high end of their respective ranges.”

​He added, “Higher-than-anticipated inflation, hurricane-related costs, and increased investments to drive distribution and consumer trial are pressuring margins in the near term. We expect fiscal 2018 operating margins to be near the low end of our guidance range as a result of these factors, and our transformation plan remains squarely on-track to achieve our fiscal 2020 targets.”