Conagra Brands Q3 EPS from continuing operations grew 112.2%Staff Writer | March 23, 2018
Conagra Brands reported that its third-quarter adjusted earnings per share from continuing operations grew 27.1% to $0.61 from $0.48, prior year.
Conagra Brands Increased input costs
Third-quarter gross profit decreased 3.6% to $599 million and adjusted gross profit decreased 4.3% to $598 million.
The company said the decreases were primarily driven by increased input costs and transportation expenses, as well as investments to drive brand saliency, enhanced distribution, and consumer trial, partially offset by realized productivity savings, and increased net sales.
Third-quarter net sales grew 0.7% to $2 billion from previous year, aided by recent acquisitions. Analysts expected revenue of $2 billion for the quarter.
Organic net sales decreased 2.2% as improving performance in domestic retail consumption and increased price/mix were offset by reductions in retailer inventory levels.
The Refrigerated & Frozen segment continued its growth momentum in the third quarter with 3.2% net sales growth.
The company said the reductions in customer inventory levels were expected in the quarter but were higher than anticipated, particularly in the Grocery & Snacks segment.
Additionally, net sales were reduced by continued investments with retail customers to drive brand saliency, enhanced distribution, and consumer trial.
Sean Connolly, CEO of Conagra Brands, said, "Our frozen portfolio, where we put most of our innovation focus this year, continues to show strong growth and share gains. Consumption in our Grocery & Snacks segment also continues to strengthen, and non-promoted consumption exceeded expectations in the quarter."
For fiscal 2018, the company now expects adjusted EPS to be in the range of $2.03 to $2.05, above the previously estimated range of $1.95 to $2.02.
Reported net sales growth is expected at approximately 150 basis points higher than the organic net sales growth rate due to the impacts of acquisitions and foreign exchange.
The company reiterated organic net sales growth near the high end of the guidance range of down 2% to flat.
Sean Connolly, CEO, said: "Overall, our transformation plan remains squarely on track. Strong underlying trends are enabling us to increase our fiscal 2018 adjusted EPS guidance above the range provided at the CAGNY conference in February, which already accounted for the impact of tax reform." ■