ConAgra Brands (NYSE: CAG) reported Q2 EPS of $0.64, $0.04 worse than the analyst estimate of $0.68. Revenue for the quarter came in at $3.1 billion versus the consensus estimate of $3 billion.

GUIDANCE:

ConAgra Brands sees FY2022 EPS of $2.50, versus the consensus of $2.47.

Outlook

• The company is reiterating its adjusted EPS guidance for fiscal 2022 and updating its organic net sales and adjusted operating margin guidance. The outlook reflects expectations for continued top line strength, and higher cost of goods sold inflation, and the timing effect of additional pricing actions.
• The company previously shared its expectations that consumer demand for its retail products would remain elevated versus historical levels throughout fiscal 2022, as consumers have developed new habits during the COVID-19 pandemic. Given the trends to date, including stronger-than-expected consumer demand and lower-than-anticipated elasticities of demand, as well as additional planned pricing actions, organic net sales growth is now expected to be higher than previously anticipated.
• The company also continues to experience elevated cost of goods sold inflation, the rate of which was higher than expected during the second quarter of fiscal 2022. The company has taken, and plans to continue taking, a variety of actions to counteract the impact of this inflation, including incremental pricing actions and cost savings measures. The company continues to expect that the timing of the associated benefits from these margin lever actions will increase as the fiscal year progresses and, as a result, the company continues to expect margins to improve in the second half of the fiscal year.
• The Company's updated fiscal 2022 guidance is as follows:
• Organic net sales growth is expected to be approximately +3% versus prior guidance of approximately +1%
• Gross inflation (input cost inflation before the impacts of hedging and other sourcing benefits) is expected to be approximately 14% versus prior guidance of approximately 11%
• Adjusted operating margin is expected to be approximately 15.5% versus prior guidance of approximately 16%
• Adjusted EPS is expected to be approximately $2.50, representing no change to prior guidance.
• The above guidance is the company's best estimate of its expected financial performance in fiscal 2022. The company's ultimate fiscal 2022 performance will be highly dependent on factors including, without limitation:
• how consumers purchase food as foodservice establishments continue to reopen and people return to in-office work and in-person school;
• the cost of goods sold inflation the company experiences;
• consumers' response to inflation-driven price increases; and
• the ability of the end-to-end supply chain to continue to operate effectively as the COVID-19 pandemic continues to evolve.
• The inability to predict the amount and timing of the impacts of foreign exchange, acquisitions, divestitures, and other items impacting comparability makes a detailed reconciliation of forward-looking non-GAAP financial measures impracticable. Please see the end of this release for more information.

For earnings history and earnings-related data on ConAgra Brands (CAG) click here.