[ACCESSWIRE]
Upcoming AWS Coverage on Kellogg
LONDON, UK / ACCESSWIRE / January 4, 2017 / Active Wall St. announces its post-earnings coverage on Conagra Brands, Inc. (NYSE: CAG). The Company reported its second quarter fiscal 2017 financial results on December 22, 2016. The packaged food maker reported better than expected earnings. The results were the first since ConAgra spun off its Lamb Weston's frozen potato business in November, 2016. Register with us now for your free membership at: http://www.activewallst.com/register/.
One of Conagra Brands' competitors within the Processed & Packaged Goods space, Kellogg Co. (NYSE: K), is estimated to report earnings on February 09, 2017. AWS will be initiating a research report on Kellogg in the coming days.
Today, AWS is promoting its earnings coverage on CAG; touching on K. Get our free coverage by signing up to:
http://www.activewallst.com/registration-3/?symbol=CAG
http://www.activewallst.com/registration-3/?symbol=K
Earnings Reviewed
For the three months ended November 27, 2016, ConAgra's net sales declined 11.5% to $2.09 billion, which was lower than analysts' forecasts of revenue of $2.11 billion. The Company attributed the decline in sales to volume declines associated with its actions to build a higher quality revenue base, divestitures, and foreign exchange. The Company estimates that the impacts of divestitures and foreign exchange lowered sales by 5.5%.
During Q2 FY17, ConAgra's adjusted gross margin was 31.1%, an increase of 250 basis points compared to a year ago. This increase was driven by supply chain cost reductions and productivity gains, and improvements in pricing and trade efficiency. The Company's adjusted gross profit dollars were down 3.6% versus Q2 FY16, as gross margin improvement was more than offset by volume declines, unfavorable FX, and the sale of the Spicetec and JM Swank businesses. The Company's adjusted operating margin was 17% for Q2 FY17, up 350 basis points from Q2 FY16 due to the gross margin improvement in SG&A reductions.
For Q2 FY17, net income attributable to ConAgra dropped to $122.1 million, or $0.28 per share, compared to $154.9 million, or $0.35 per share, a year earlier. Excluding items, the Company earned $0.49 per share from continuing operations, up 25.6% on a y-o-y basis and outperformed Wall Street estimates of $0.45 per share.
Segment Results
During Q2 FY17, net sales from ConAgra's Grocery & Snacks Segment decreased 6% to $854 million. The Company stated that disciplined pricing and trade promotion practices resulted in price/mix increasing 1% while volume declined 7%. In the reported quarter, the segments adjusted operating profit was $222 million, an increase of 18%.
In the Refrigerated & Frozen Segment, ConAgra reported an approximately 11% drop in net sales to $740 million. Price/mix increased 1% and volume declined over 11%, reflecting the continued actions to upgrade the volume base by optimizing pricing, improving trade promotion productivity, and SKU rationalization. Adjusted segment operating profit was $120 million in the reported quarter, down 7.5%.
For Q2 FY17, sales from ConAgra's International segment fell 5% to $211 million. A 2% increase in price/mix was offset by a 4% decrease in foreign exchange and 3% decrease in volume. The segment reported adjusted segment operating profit of $18 million in Q2 FY17, down 17%, driven primarily by the negative impact of the weakening Mexican peso.
During the reported quarter, net sales for ConAgra's foodservice segment decreased 1% to $283 million. Adjusted operating profit was $32 million in Q2 FY17, an increase of 56% versus a year ago. The adjusted segment operating profit increase was primarily due to a one-time inventory write-down cost incurred in the year-ago corresponding quarter for the business the Company exited.
Balance Sheet
ConAgra ended Q2 FY17 with $3.5 billion of total debt and approximately $1.4 billion of cash on hand. In H1 2017, the Company's total debt was reduced by approximately $2 billion. The Company had capital expenditures of $118 million for H1 2017 versus $110 million in the comparable year's same period.
ConAgra's Board of Directors approved its first dividend since the completion of the spin-off of the Lamb Weston business on November 09, 2016. A quarterly dividend payment of $0.20 per share will be paid on March 01, 2017, to stockholders of record as of the close of business on January 30, 2017. The Company also repurchased approximately 2.2 million shares for $85 million during the reported quarter.
Outlook
ConAgra reaffirmed its FY17 outlook. The Company expects net sales to decrease between 4% and 5% (excluding the impacts of divestitures), and to achieve adjusted gross margin of 30.4% to 30.6%, adjusted operating margin of 15.3% to 15.5%, and adjusted EPS of between $1.65 and $1.70.
Stock Performance
At the closing bell, on Tuesday, January 03, 2016, Conagra Brands' stock marginally climbed 0.53%, ending the trading session at $39.76. A total volume of 2.61 million shares were traded at the end of the day. In the last month and previous three months, shares of the company have advanced 9.02% and 8.06%, respectively. Moreover, the stock gained 0.53% since the start of the year. The company's shares are trading at a PE ratio of 38.79 and have a dividend yield of 2.01%.
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SOURCE: Active Wall Street
