Conagra Brands Q2 profit up 83 percentStaff Writer | December 21, 2017
Conagra Brands reported an 83 percent increase in profit for the second quarter from last year as higher sales more than offset input cost inflation as well as planned increases in selling, general, and administrative expenses.
Conagra Brands Net income attributable increased to $223.5 million
Second-quarter net income attributable to Conagra increased to $223.5 million or $0.54 per share from $122.1 million or $0.28 per share a year ago.
Adjusted earnings from continuing operations were $0.55 per share, compared to $0.49 per share last year. On average, 14 analysts polled by Thomson Reuters expected the company to earn $0.52 per share. Analysts' estimates typically exclude special items.
Adjusted gross margin declined to 30.1 percent from 31.1 percent a year ago. The company noted that higher-than-anticipated inflation, hurricane-related costs, and increased investments to drive distribution and consumer trial are pressuring margins in the near term.
Net sales for the quarter increased 4.1 percent to $2.17 billion from $2.09 billion a year ago. Analysts had a consensus revenue estimate of $2.07 billion.
Organic net sales rose 2.3 percent, reflecting continued improvements in domestic retail volume growth, partially offset by increased investments to drive distribution and consumer trial.
The company estimates that the recent hurricanes increased its net sales and organic net sales growth rates by approximately 220 basis points.
For fiscal 2018, Conagra now expects adjusted earnings per share from continuing operations near the high end of the range of $1.84 to $1.89 per share and organic net sales growth also near the high end of the range of 2 percent decline to flat.
Adjusted operating margin is now expected near the low end of the range of 15.9 percent to 16.3 percent.
Conagra also said it has agreed to acquire the Sandwich Bros. of Wisconsin business, which produces frozen breakfast and entrée flatbread sandwiches.
Financial terms of the deal were not disclosed. The transaction is expected to close in early 2018. ■