Benzinga | Oct 7, 2021 09:44AM EDT

Conagra Brands Q1 Earnings Top Estimates; Reaffirms FY22 EPS Outlook

* Conagra Brands Inc (NYSE:CAG) reported a first-quarter FY22 sales decline of 1% year-on-year, to $2.65 billion, beating the analyst consensus of $2.54 billion.

* The 0.4% decrease in organic net sales was driven by a 2.0% drop in volume and a favorable price/mix impact of 1.6%.

* On a two-year compounded annualized basis, Q1 net sales increased 5.3%, and organic net sales rose 7.0%.

* Net sales from the Refrigerated & Frozen segment decreased 2.5% Y/Y, Grocery & Snacks segment fell 4.9%, International segment increased 8.1%, and Foodservice segment rose 20.9%.

* Gross profit decreased 16.9% Y/Y to $673 million, while the gross margin fell 486 basis points to 25.4%.

* The operating margin was 13.7%, and operating income for the quarter declined 28.7% to $363.3 million.

* Conagra Brands held $68 million in cash and equivalents as of August 29, 2021.

* Adjusted EBITDA decreased 22.6% Y/Y to $501 million.

* Adjusted EPS of $0.50 beat the analyst consensus of $0.49.

* Outlook: Conagra Brands reaffirmed FY22 EPS guidance of ~$2.50 versus the consensus of $2.46.

* The company expects organic net sales growth to be +1% versus prior guidance of approximately flat.

* Price action: CAG shares are trading higher by 0.38% at $34.61 on the last check Thursday.