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Conagra(CAG) - 2025 Q3 - Quarterly Results
CAGConagra(CAG)2025-04-03 11:32

Financial Performance - Net sales decreased 6.3% to 2.8billion,withorganicnetsalesdown5.22.8 billion, with organic net sales down 5.2% driven by a 2.1% negative impact from price/mix and a 3.1% decrease in volume[5]. - Gross profit decreased 17.3% to 710 million, and adjusted gross profit decreased 19.1% to 704millionduetolowernetsalesandinflationincostofgoodssold[6].−Reporteddilutedearningspershare(EPS)was704 million due to lower net sales and inflation in cost of goods sold[6]. - Reported diluted earnings per share (EPS) was 0.30, a 53.1% decrease, while adjusted EPS was 0.51,a26.10.51, a 26.1% decrease[6]. - Net income attributable to Conagra Brands decreased 53.0% to 145 million, or 0.30perdilutedshare,comparedto0.30 per diluted share, compared to 309 million, or 0.64perdilutedshareintheprioryear[11].−Year−to−datenetsaleswere0.64 per diluted share in the prior year[11]. - Year-to-date net sales were 8,831.0 million, a decline of 3.4% from 9,145.0millioninthesameperiodlastyear[53].−Year−to−datenetincomeattributabletoConagraBrands,Inc.was9,145.0 million in the same period last year[53]. - Year-to-date net income attributable to Conagra Brands, Inc. was 896.4 million, down 2.0% from 914.5millionyear−over−year[53].−AdjustednetincomeforQ3FY25was914.5 million year-over-year[53]. - Adjusted net income for Q3 FY25 was 242.1 million, with diluted EPS of 0.51,down26.30.51, down 26.3% compared to the previous year[59]. - Net income for the thirty-nine weeks ended February 23, 2025, was 896.5 million, down from 914.9million,reflectingadecreaseofabout2.6914.9 million, reflecting a decrease of about 2.6%[55]. Cash Flow and Debt - Free cash flow decreased by 180 million to 1.0billion,withcapitalexpendituresat1.0 billion, with capital expenditures at 304 million compared to 310millionintheprioryear[25].−Thecompanyendedthequarterwithnetdebtof310 million in the prior year[25]. - The company ended the quarter with net debt of 8.1 billion, representing a 5.9% reduction in net debt versus the prior year period[28]. - Cash and cash equivalents at the end of the period decreased to 49.4millionfrom49.4 million from 78.5 million, a drop of approximately 37.1%[55]. - Year-to-date (YTD) net cash flows from operating activities decreased by 12.1% to 1,346.2millioncomparedto1,346.2 million compared to 1,531.3 million in the previous year[63]. - Free cash flow for YTD FY25 was 1,042.0million,down14.71,042.0 million, down 14.7% from 1,221.7 million in FY24[63]. - Total debt as of February 23, 2025, was 8,145.1million,downfrom8,145.1 million, down from 8,677.3 million in the previous year[63]. - The net debt to adjusted EBITDA ratio was 3.59 as of February 23, 2025[64]. Segment Performance - The Grocery & Snacks segment net sales decreased 3.2% to 1.2 billion, with a volume share gain in snacking and staples categories[13]. - Year-over-year change in net sales for the Grocery & Snacks segment was a decrease of 3.9%[56]. - Grocery & Snacks segment operating profit decreased by 20.6% year-over-year to 237.6 million[57]. - Refrigerated & Frozen segment operating profit saw a significant decline of 52.5% year-over-year, totaling 95.7million[57].−TheInternationalsegmentreporteda49.895.7 million[57]. - The International segment reported a 49.8% increase in operating profit year-over-year, reaching 107.6 million[58]. - Conagra Brands experienced a decline in adjusted operating profit across all segments, with the most significant drop in Refrigerated & Frozen at 38.8%[57]. Expenses and Costs - Selling, general, and administrative expense (SG&A) increased 14.5% to 444million,primarilyduetochargesrelatedtolegacylegalmatters[9].−Theeffectivetaxratewas23.3444 million, primarily due to charges related to legacy legal matters[9]. - The effective tax rate was 23.3%, slightly down from 23.7% in the prior year quarter[23]. - Cost of goods sold decreased by 2.0% to 2,130.7 million from 2,174.1millionyear−over−year[52].−Legalmattersaccountedfor2,174.1 million year-over-year[52]. - Legal matters accounted for 95.8 million in expenses in Q3 FY25, impacting overall profitability[57]. - The company reported a loss on divestitures of 27.2millioninthethirdquarter,comparedtonolossinthesameperiodlastyear[52].−Thecompanyreportedassetimpairmentchargesof27.2 million in the third quarter, compared to no loss in the same period last year[52]. - The company reported asset impairment charges of 121.3 million for the thirty-nine weeks ended February 23, 2025, compared to 50.9millionintheprioryear[55].−Restructuringplanscontributed50.9 million in the prior year[55]. - Restructuring plans contributed 90.7 million to operating profit adjustments YTD[58]. Guidance and Future Outlook - The company's fiscal 2025 guidance remains unchanged, expecting organic net sales to decline approximately 2% compared to fiscal 2024 and adjusted EPS of approximately 2.35[6][35]. - The company revised its calculation methodology for Adjusted SG&A to include advertising and promotional expenses, impacting prior-year comparisons[47]. Other Financial Metrics - Adjusted EBITDA for YTD FY25 was 1,680.4 million, reflecting an 11.9% decrease from 1,906.8millioninFY24[65].−Year−to−date(YTD)reportedgrossprofitforQ3FY25was1,906.8 million in FY24[65]. - Year-to-date (YTD) reported gross profit for Q3 FY25 was 2,296.3 million, accounting for 26.0% of net sales, a decline of 9.2% year-over-year[61]. - The company reported a corporate hedging derivative loss of 7.7millioninQ3FY25,affectingoverallprofitability[59].−Thecompanyincurredanetcashoutflowfrominvestingactivitiesof7.7 million in Q3 FY25, affecting overall profitability[59]. - The company incurred a net cash outflow from investing activities of 457.2 million, compared to $295.6 million in the previous year[55].