ConAgra Falls Short On Q4 Revenue Amid Unfavorable Price Mix

ConAgra Brands, Inc. CAG shares are trading lower on Thursday after the fourth-quarter results were reported.

The company reported adjusted earnings per share of 61 cents, beating the analyst consensus estimate of 57 cents. Quarterly revenues of $2.905 billion missed the street view of $2.930 billion.

The company’s reported net sales decreased by 2.3% and organic net sales decreased by 2.4%.

ConAgra said that the decrease was driven by a 0.6% negative impact from price/mix, largely due to the company’s strategic investments in the quarter, and a 1.8% decrease in volume, primarily due to continued lower consumption trends.

Also See: Food Giants Pivot To Discounts And New Sizes Amid Decreased Spending by Low-Income Americans

Gross margin increased 135 basis points to 27.7% in the quarter, and adjusted gross margin increased 62 basis points to 27.6%.

Adjusted EBITDA, which includes equity method investment earnings and pension and postretirement non-service income, was $577 million in the quarter, ConAgra added.

The company ended the year with net debt of $8.4 billion, representing an 8.5% reduction in net debt versus the prior year, resulting in a 3.37x net leverage ratio at fiscal year-end.

“Looking ahead, we expect a gradual waning of the challenging industry trends seen throughout fiscal year 2024, as consumers adapt and establish new reference prices,” said Sean Connolly, president and chief executive officer.

Dividend: ConAgra approved the continuation of the company’s annualized dividend rate of $1.40 per share.

The company’s quarterly dividend payment of $0.35 per share will be paid on August 29 to stockholders of record as of the close of business on August 1.

Outlook: ConAgra sees FY25 organic net sales to be down 1.5% to flat compared to fiscal 2024 and adjusted EPS between $2.60 and $2.65 versus the $2.63 estimate.

The company’s FY25 adjusted operating margin is expected between 15.6% and 15.8%. The company also expects the cost of goods sold inflation to continue into fiscal 2025.

Price Action: CAG shares are trading lower by 2.43% to $28.11 premarket at last check Thursday.

Image via Shutterstock

Read Next:

• Biden Administration Injects $1.7B into EV Manufacturing Facilities Of General Motors, Stellantis & More