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May 31, 2020
ConAgra Q4 2020 Earnings Report
Conagra's Q4 2020 earnings were marked by a significant increase in net sales and adjusted EPS, driven by elevated retail demand due to the COVID-19 pandemic.
Key Takeaways
Conagra Brands reported strong fourth-quarter results, with net sales increasing by 25.8% and adjusted EPS more than doubling. The company benefited from increased at-home eating due to the COVID-19 pandemic, which boosted retail demand and offset reduced foodservice demand. Conagra exceeded its free cash flow guidance and reduced its leverage ratio.
Net sales increased 25.8%, with organic net sales up 21.5%, driven by double-digit growth in all three retail segments.
Diluted EPS grew 57.7% to $0.41, and adjusted EPS more than doubled to $0.75.
The company reduced total debt by $271 million and net debt by $725 million, progressing against deleveraging commitments.
Guidance for first quarter fiscal 2021 includes organic net sales growth of 10% to 13% and adjusted EPS in the range of $0.54 to $0.59.
Revenue by Segment
Forward Guidance
Conagra provided first quarter fiscal 2021 guidance, expecting organic net sales growth of 10% to 13% and adjusted EPS of $0.54 to $0.59. The company anticipates retail and foodservice demand levels to trend toward historical norms as the fiscal year progresses.
Positive Outlook
- Organic net sales growth of 10% to 13%.
- Adjusted operating margin of 17.0% to 17.5%.
- Adjusted EPS of $0.54 to $0.59.
- Confidence in achieving leverage ratio target of 3.5x to 3.6x by the end of fiscal 2021.
- Reaffirming fiscal 2022 algorithm of organic net sales growth of 1% to 2%.
Challenges Ahead
- Uncertainty regarding the impact of the COVID-19 pandemic on fiscal 2021 consolidated results.
- Expectation that retail and foodservice demand levels will trend toward historical norms, but the degree and timing are difficult to predict.
- Continued reduced demand for foodservice products compared to pre-COVID-19 pandemic levels.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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