Conagra Brands, Inc. (NYSE: CAG) reported quarterly earnings before the opening bell.
The Chicago-based Conagra reported that in the quarter, net sales increased 1.7%. The recent acquisitions of Angie's BOOMCHICKAPOP and Sandwich Bros. of Wisconsin added 200 basis points to the net sales growth rate.
The sales of the Trenton, Missouri production facility and the Canadian Del Monte business reduced the net sales growth rate by 120 basis points.
In the quarter, gross profit and adjusted gross profit decreased 0.7% and 0.6%, respectively. Supply chain realized productivity, favorable price/mix and the profit contribution from recent acquisitions were more than offset by higher transportation and input costs as well as the previously-mentioned increases in retailer investments.
In the quarter, selling, general, and administrative (SG&A) expenses decreased 0.9%. As expected, adjusted SG&A expenses increased 9.7% behind higher stock-based compensation expense due to a higher stock price compared to the prior-year period, increased spending on certain planned projects, and planned decreases in transition service agreement income.
CEO Sean Connolly commented, "Fiscal 2019 is off to a good start despite a continued, challenging inflationary environment. Our first quarter results were largely in-line with expectations as we delivered net sales growth in all four operating segments behind a strong innovation slate.
“We also earned increased distribution, particularly in our frozen business. We continue to stay focused on supporting our brands with robust marketing programs, including increased retailer investments, to drive brand saliency, enhanced distribution, and consumer trial of our products."
Shares wilted $2.15, or 6%, to $33.91
