LONDON, UK / ACCESSWIRE / October 10, 2017 / Pro-Trader Daily has just published a free post-earnings coverage on Conagra Brands, Inc. (NYSE: CAG) ("Conagra"), which can be viewed by registering at http://protraderdaily.com/optin/'symbol=CAG, following the Company's announcement of its financial results on September 28, 2017, for the first quarter fiscal 2018. The Company's adjusted gross margin, as a percentage of revenue, increased 20 basis points on a y-o-y basis. Our daily stock reports are accessible for free, and with those to look forward today you also will be signing up for a complimentary member's account at:
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Earnings Reviewed
For three months ended August 27, 2017, Conagra's net revenue decreased 5.2% to $1.80 billion from $1.90 billion in Q1 FY17. The decrease was due to a higher level of investment activity negatively impacting net revenue. The Company's net revenue surpassed analysts' expectations of $1.79 billion.
During Q1 FY18, the Company's gross profit decreased 4.7% to $519.0 million from $544.6 million in Q1 FY17. For the reported quarter, the Company's adjusted gross profit decreased 3.9% to $527.3 million from $549.1 million in Q1 FY17. During Q1 FY18, Conagra's adjusted gross margin increased 20 basis points to 29.2% of revenue from 29.0% of revenue in Q1 FY17.
For the reported quarter, Conagra's selling, general, and administrative (SG&A) expenses increased 3.2% to $239.0 million from $231.7 million in Q1 FY17. During Q1 FY18, the Company's net interest expenses decreased 37.5% to $36.4 million from $58.2 million in Q1 FY17.
During Q1 FY18, Conagra's net income increased 55.8% to $153.6 million from $98.6 million in Q1 FY17. During Q1 FY18, Conagra's diluted EPS increased 63.6% to $0.36 from $0.22 in Q1 FY17. For the reported quarter, the Company's adjusted diluted EPS increased 17.9% to $0.46 from $0.39 in Q1 FY17. The adjusted diluted EPS surpassed analysts' expectations of $0.41.
Conagra's Segment Details
Grocery & Snacks - During Q1 FY18, the Grocery & Snacks segment's net revenue decreased 1.5% to $745.8 million from $757.2 million in Q1 FY17. During Q1 FY18, the segment's organic revenue decreased 5.1% to $718.2 million from $757.2 million in the same period last year. For the reported quarter, the Company's operating income decreased 2.4% to $176.2 million from $180.5 million in Q1 FY17. During Q1 FY18, the segment's adjusted operating income decreased 1.2% to $183.2 million from $185.4 million in the same period last year.
Refrigerated & Frozen - During Q1 FY18, the Refrigerated & Frozen segment's net revenue increased 1.8% to $615.7 million from $604.6 million in Q1 FY17. During Q1 FY18, the segment's organic revenue increased 1.2% to $612.3 million from $604.6 million in the same period last year. During Q1 FY18, the segment's adjusted operating income increased 4.9% to $101.9 million from $97.2 million in the same period last year. The increase was due to increased net sales, the timing of advertising and promotion (A&P) investments, reductions in SG&A expenses, and non-recurring recall expenses in Q1 FY17.
International - During Q1 FY18, the International segment's net revenue decreased 1.9% to $190.9 million from $194.7 million in Q1 FY17. During Q1 FY18, the segment's organic revenue decreased 3.5% to $187.7 million from $194.7 million in the same period last year. During Q1 FY18, the segment's adjusted operating income increased 29.1% to $18.9 million from $14.6 million in the same period last year. The increase was due to higher price mix and lower A&P expenses.
Foodservice - During Q1 FY18, the Foodservice segment's net revenue decreased 6% to $251.8 million from $268.0 million in Q1 FY17. For the reported quarter, the Company's operating income increased 6.8% to $23.2 million from $21.7 million in Q1 FY17. During Q1 FY18, the segment's adjusted operating income decreased 1.4% to $23.2 million from $23.5 million in the same period last year.
Balance Sheet
As on August 27, 2017, Conagra's cash and cash equivalents was $251.4 million, at par with $251.4 million in Q4 FY17.
During Q1 FY18, the Company's net receivables increased 2.4% to $577.1 million from $563.4 million in Q4 FY17.
For the reported quarter, Conagra's inventories increased 14.5% to $1.07 billion from $934.2 million in Q4 FY17.
For the reported quarter, Conagra's accounts payable increased 9.3% to $845.7 million from $773.1 million in Q1 FY17.
During Q1 FY18, the Company's cash provided by operating activities decreased 32.0% to $141.5 million from $208.3 million in Q1 FY17.
On September 21, 2017, the Company's Board of Directors declared a quarterly dividend of $0.21 per share, payable on November 30, 2017, to stockholders of record at the close of business on October 31, 2017.
Outlook
For FY18, Conagra expects both net revenue growth and organic revenue growth to be in the range of negative 2% to 0%. The Company expects adjusted operating margin to be in the range of 15.9% to 16.3% and effective tax rate to be in the range of 32.5% to 33.5% for fiscal 2018.
The Company estimates adjusted diluted EPS to be in the range of $1.84 to $1.89 for fiscal 2018.
Stock Performance
On Monday, October 09, 2017, the stock closed the trading session at $33.46, slipping 1.82% from its previous closing price of $34.08. A total volume of 2.44 million shares have exchanged hands. Conagra Brands' stock price advanced 1.18% in the last three months. The stock is trading at a PE ratio of 24.16 and has a dividend yield of 2.54%. At Monday's closing price, the stock's net capitalization stands at $13.89 billion.
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