Conagra sees ‘benign’ impact from pricing actions, ‘Our elasticities have consistently been better,’ says CEO

Conagra delivered net sales of $2.9bn in the first quarter of fiscal 2023, a 9.5% increase over the period one year ago and up just over 24% compared to the same quarter three years ago (ie. pre-pandemic). A 9.7% increase in organic net sales was driven by a 14.3% improvement in price/mix, which was partially offset by a 4.6% decrease in volume.

In the quarter, net loss attributable to Conagra Brands was $78m owing to charges totaling $385.7m ($326.8 million after-tax) related to the goodwill and Birds Eye brand impairments, charges totaling $26.7m ($20.1 million after-tax) related to the impairment of businesses held for sale, and net charges totaling $4.9 million ($3.7 million after-tax) in connection with the company’s restructuring plans, according to the Conagra’s 10-Q SEC filing form.

Performance was strongest in the company’s snacks and frozen divisions which continued to gain market share on a one- and three-year basis. 

“Overall, Conagra delivered strong first quarter results. We had robust net sales growth across our portfolio, mainly due to the impact of our inflation-driven pricing actions coupled with ongoing limited elasticities,”​ said CEO Sean Connolly on the company’s Q1 earnings call.

‘Highly relevant staples drive demand’

Sales of snacks and staples items in increased by 13% year on year in Q1 and were up 36% vs. 2019.

“In particular, we saw significant growth in sales of microwave popcorn, which increased more than 20% compared to the prior year,”​ said Connolly. 

“Our highly relevant staples domain also accelerated sales growth increasing 8% compared to the prior year and 15% versus three years ago. This was driven by strong performance in single-serve dinners and entrees, with toppings, pickles and canned tomatoes.”

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