Conagra(US:CAG)2025-04-03 11:32Financial Performance - Net sales decreased 6.3% to $2.8 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 $704 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, a 26.1% decrease[6]. - Net income attributable to Conagra Brands decreased 53.0% to $145 million, or $0.30 per diluted share, compared to $309 million, or $0.64 per diluted share in the prior year[11]. - Year-to-date net sales were $8,831.0 million, a decline of 3.4% from $9,145.0 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 $914.5 million year-over-year[53]. - Adjusted net income for Q3 FY25 was $242.1 million, with diluted EPS of $0.51, 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 $914.9 million, reflecting a decrease of about 2.6%[55]. Cash Flow and Debt - Free cash flow decreased by $180 million to $1.0 billion, with capital expenditures at $304 million compared to $310 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 $49.4 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 $1,346.2 million compared to $1,531.3 million in the previous year[63]. - Free cash flow for YTD FY25 was $1,042.0 million, down 14.7% from $1,221.7 million in FY24[63]. - Total debt as of February 23, 2025, was $8,145.1 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 $95.7 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 $444 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 $2,174.1 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 $27.2 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 $50.9 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 $1,906.8 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 $7.7 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].