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Conagra Brands Sees Slowed Sales Despite New Product Debuts

The company is optimistic for 2024.

Kristen Kazarian

January 11, 2024

3 Min Read
Conagra sales decline but new products debut
Conagra Brands had a tough 2nd Quarter. Image courtesy of Conagra Brands

Conagra Brands offers popular brands such as Hunts, Swiss Miss, Slim Jim, Angie's Boomchickapop, David's Sunflower Seeds, Vlasic, Snack Pack, Reddi Whip, BIrd's Eye and Duncan Hines, and more. The company just shared its 2nd quarter fiscal year 2024 results.

The food company saw sales slide 3.2% from the previous year, in its 2nd quarter, which ended November 26, 2023. Gross profit also slumped 8.2% to $847 million in the quarter.

"Despite an ongoing challenging macro environment, we saw several positive signs in Q2. In particular, volume trends in our domestic retail business improved substantially, as inflation-driven volume declines were cut in half compared to Q1,” said Sean Connolly, president and chief executive officer of Conagra Brands.

“Most importantly, our targeted investments in our frozen business generated strong lifts and market share gains. These developments reinforced our confidence in investing to build momentum in the second half and set up a strong FY25."

Both Grocery & Snacks and Refrigerated & Frozen segments saw decreased sales in the quarter, with a 4.1% decrease and a 5.8% decrease respectively.

However, the International segment increased by 8.1% — a 2.5% increase from foreign exchange and a 5.6% increase due to organic net sales.

Another segment in Conagra Brands that did favorable was the Foodservice segment. Reported and organic net sales for the Foodservice segment increased 4.3%

The company is lowering its fiscal 2024 organic net sales growth, operating margin, and adjusted EPS outlook to reflect year-to-date results, expectations for a slower volume recovery, and increased brand investments in the second half of the fiscal year.

The company's fiscal 2024 guidance includes:

  • Organic net sales to decrease between 1.0% and 2.0% compared to fiscal 2023

  • Adjusted operating margin is expected to be approximately 15.6%

  • Adjusted EPS is expected to be between $2.60 and $2.65

  • Net Leverage Ratio of approximately 3.55x

  • Capital expenditures of approximately $450M

  • Interest expense of approximately $440M

  • Adjusted effective tax rate of approximately 24%

  • No pension income

  • Ardent Mills (flour supplier) contribution of approximately $170M

During its 2nd Quarter, Conagra Brands was in the news for a few things.

In September 2023, Francisco Frag, SVP and Chief Information Officer, US Pharmaceutical, at McKesson Corp., was appointed to Conagra Brands’ Board of Directors. Prior to McKesson, Fraga was SVP and chief information & technology officer at Campbell Soup Co. and in various information technology leadership roles including vice president global chief technology officer and CIO of Feminine Care at Procter & Gamble.

Also in September, Conagra Brands Foundation awarded grants to 20 local nonprofits through the Nourish Our Community Program. Each September, the Nourish Our Community grants are distributed to employee-nominated nonprofit organizations that address the issue of domestic hunger and food insecurity, cooking skills, nutrition education, healthy and active lifestyle and/or urban agriculture.

News from the #1 meat stick brand Slim Jim follows the recent success of the its 3 oz. Savage Size that grabbed $160MM in retail sales since launch, Slim Jim is upping their game: weighing in at nearly 4 oz., the new Slim Jim Monster Original Twin Pack offers a double helping of 1.94 oz. Monster Original, currently the #2 selling item in all of meat snacks in Convenience.

Another in its Snacks division cranks up the heat with Andy Capp's new hottest product ever – Fire Fries.

The company’s BiGS Sunflower Seeds debuted BiGS Vlasic Spicy Dill Pickle Sunflower Seeds, which is a spicy variation of #1 selling flavored sunflower seed (BiGS Vlasic Dill Pickle).

Conagra also came up with a neat holiday innovation: A candle that looks and smells like a cup of Swiss Miss hot cocoa.

With all of these innovations just coming out in its Q2, we will watch to see how they fare in coming quarters.

About the Author(s)

Kristen Kazarian

Managing Editor

Kristen Kazarian has been a writer and editor for more than three decades. She has worked at several consumer magazines and B2B publications in the fields of food and beverage, packaging, processing, women's interest, local news, health and nutrition, fashion and beauty, automotive, and computers.

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