Conagra Brands has released it first quarter results for fiscal year 2024, that ended on August 27, 2023.
According to the global branded food maker, its first quarter net sales were flat to the prior year; organic net sales decreased 0.3%, with an operating margin in the quarter being 16.8% representing a 1,757 basis point increase over the prior year quarter. Adjusted operating margin was 16.7% representing a 297 basis point increase over the prior year quarter.
In the quarter, net sales were $2.9 billion, which according to Conagra Brands came in a 0.3% increase from the favorable impact of foreign exchange but with a 0.3% decrease in organic net sales.
The 0.3% decrease in organic net sales was driven by a 6.6% decrease in volume largely due to industry-wide slowdown in consumption and recent consumer behavior shifts, partially offset by a 6.3% improvement in price/mix.
Gross profit increased 14.3% to US$823 million in the quarter, and adjusted gross profit increased 10.9% to US$801 million. First quarter gross profit increased primarily because of inflation-driven pricing that was implemented in fiscal 2023 and productivity, which more than offset the negative impacts of cost of goods sold inflation, unfavorable operating leverage, and lower organic net sales. Gross margin increased 354 basis points to 28.3% in the quarter, and adjusted gross margin increased 272 basis points to 27.6%.
"I am proud of our team for delivering another quarter of strong margin recovery and EPS growth despite facing industry-wide macro dynamics that have affected consumer purchasing behavior and elongated the volume recovery period,” says Sean Connolly, president and chief executive officer of Conagra Brands, of the results. “We will continue to focus on executing our Conagra Way playbook as we make targeted and disciplined investments throughout the remainder of the year to drive the top-line. We are reaffirming our guidance for fiscal 2024, reflecting confidence in our plans, people and agility as we continue to navigate a shifting consumer environment."