Conagra Brands, Inc. reported its financial results for the thirteen weeks ended August 25, 2024, revealing a decrease in net sales but a significant increase in net income compared to the same period in the previous fiscal year. Net sales totaled $2,794.9 million, down from $2,904.0 million for the thirteen weeks ended August 27, 2023, reflecting a 3.8% decline. This decrease was attributed to increased strategic trade investments and reduced volume across several segments, including Grocery & Snacks, Refrigerated & Frozen, and Foodservice.

Despite the drop in sales, net income surged to $466.9 million, compared to $319.9 million in the prior year, driven by a substantial income tax benefit of $138.9 million, which contrasted with an expense of $98.3 million in the previous year. The earnings per share (EPS) also improved, with diluted EPS rising to $0.97 from $0.67.

The company’s operating profit for the quarter was $493.8 million, a decrease from $525.7 million in the same quarter last year. Segment performance varied, with the International segment showing a notable increase in operating profit, while Grocery & Snacks and Refrigerated & Frozen segments experienced declines. The Grocery & Snacks segment reported net sales of $1,182.7 million, down 1.7%, while the Refrigerated & Frozen segment saw a 5.7% decrease to $1,086.4 million.

Conagra made strategic moves during the quarter, including the acquisition of Sweetwood Smoke & Co. for $180.2 million and a co-manufacturer for cooking spray products for $50.2 million. These acquisitions contributed positively to the Grocery & Snacks segment, although their overall impact on earnings was not material through the reporting period.

Cash and cash equivalents increased to $128.7 million from $77.7 million at the end of the previous quarter. However, cash flows from operating activities decreased significantly to $268.6 million from $443.5 million, primarily due to lower operating profits and changes in working capital. The company also reported a net loss of $2.3 million from the sale of a 51.8% stake in Agro Tech Foods Limited, which generated net proceeds of $76.8 million.

Conagra's total current assets rose to $3,416.2 million, while total current liabilities increased to $3,646.8 million. The company’s long-term debt remained stable at $7.51 billion, with a fair value estimated at $7.52 billion. The company continues to maintain compliance with financial covenants under its revolving credit facility, which has a maximum principal amount of $2.0 billion.

Overall, Conagra Brands, Inc. navigated a challenging market environment with strategic acquisitions and a focus on improving profitability, despite facing declines in net sales across key segments.