Net sales for Conagra Brands decreased 2.3% to $2.9 billion during the fourth quarter of fiscal year 2024, which ended on May 26, 2024. Full year net sales slipped by 1.8% to $12.1 billion, while organic net sales decreased 2.1%. Adjusted earnings per share (EPS) was $0.61 in Q4 and between $2.60 and $2.65 for the full year.
The Chicago-headquartered company reported that organic net sales in the Refrigerated & Frozen segment fell 3.8% to $1.2 billion, driven by a price/mix decrease of 4.7%, partially offset by a volume increase of 0.9%. Both price/mix and volume were driven by the impacts of its brand-building investments. In the quarter, Conagra gained unit share in categories such as frozen single serve meals, frozen sides and frozen vegetables.
Operating loss for the segment was $713 million in Q4 as a result of the goodwill and brand impairment charges outlined above. Adjusted operating profit decreased 13.1% to $190 million as higher productivity was more than offset by the negative impacts of lower organic net sales, cost of goods sold inflation, and increased SG&A.
Grocery & Snacks Segment Results
Reported and organic net sales in Conagra’s Grocery & Snacks segment declined 2.1% to $1.2 billion in the fourth quarter, driven by a price/mix increase of 1.5%, offset by a volume decrease of 3.6%. Price/mix was driven by favorability in inflation-driven pricing and the volume decrease was driven by the elasticity impact from the inflation-driven pricing actions and continued lower consumption trends. In the quarter, the company gained unit share in snacking categories including microwave popcorn and seeds, and some staples categories including chili and cooking sprays.
Operating profit for the segment rose 12.6% to $175 million in Q4 and adjusted operating profit increased 8.9% to $255 million as higher productivity and lower SG&A more than offset the negative impacts of lower organic net sales, cost of goods sold inflation, and increased A&P. In addition, the company received a $7 million net benefit related to insurance proceeds for prior year lost sales from its canned meat recall.
International Segment Results
Net sales for the International segment advanced by 6.4% to $267 million in the court quarter reflecting a 2.1% increase from the favorable impact of foreign exchange and a 4.3% gain in organic net sales.
On an organic net sales basis, price/mix increased 0.2% and volume rose 4.1%, primarily driven by a strong performance in the company’s Mexico and global exports businesses.
Operating profit for the segment rose 26.7% to $26 million in the quarter and adjusted operating profit decreased 15.6% to $29 million as the benefits from higher organic net sales and productivity were more than offset by the negative impacts of cost of goods sold inflation, increased SG&A, and isolated issues in our Canadian manufacturing facilities.
Foodservice Sector
Reported and organic net sales for the Foodservice segment decreased 3.9% to $291 million in Q4, driven by a price/mix increase of 6.4% and volume decrease of 10.3% due to the ongoing impact of previously disclosed lost business and continuing softness in restaurant traffic.
Operating profit for the segment increased 25.9% to $40 million, and adjusted operating profit increased 39.9% to $40 million in the quarter as the benefits of higher productivity and lower SG&A more than offset the negative impacts of lower organic net sales, cost of goods sold inflation, and unfavorable operating leverage.
Sean M. Connolly, president and chief executive officer of Conagra Brands, commented: “Our investments in brands continued to yield results, and again drove volume improvement in our domestic retail business. Progress was most notable in our key Frozen and Snacks domains, where we also saw market share gains. Additionally, our supply chain productivity initiatives enabled us to expand adjusted gross margins, and we continued to strengthen the balance sheet and reduce our net leverage ratio. Looking ahead, we expect a gradual waning of the challenging industry trends seen throughout fiscal year 2024, as consumers adapt and establish new reference prices. We will continue to invest wisely to support our brands and facilitate that process.”
Among Conagra’s popular frozen food retail brands are Birds Eye, Healthy Choice, Marie Callender’s, Banquet, Celeste Pizza, Hungry Man, Alexia, Van de Kamp’s, Evol and Gardein.
