Conagra Q2 adj EPS $0.81 beats, net sales +8.3%; raises FY2023 guidance

The company is raising its fiscal 2023 guidance to reflect: ○ Organic net sales growth of 7% to 8% compared to fiscal 2022 ○ Adjusted operating margin between 15.3% and 15.6% ○ Adjusted EPS between $2.60 and $2.70 representing growth of 10% to 14% compared to fiscal 2022

In the quarter, net sales increased 8.3% to $3.3 billion. The increase in net sales primarily reflects: ● a 0.3% decrease from the unfavorable impact of foreign exchange; and ● an 8.6% increase in organic net sales. The 8.6% increase in organic net sales was driven by a 17.0% improvement in price/mix, which was partially offset by an 8.4% decrease in volume. Price/mix was driven by the company’s inflation-driven pricing actions that were reflected in the marketplace throughout the quarter. The volume decrease was primarily a result of the elasticity impact from inflation-driven pricing actions; however, the elasticity impact was favorable to expectations. CONAGRA BRANDS Page 2 Gross profit increased 22.2% to $922 million in the quarter, and adjusted gross profit increased 21.7% to $933 million. Second quarter gross profit benefited from higher organic net sales and productivity, which more than offset the negative impacts of cost of goods sold inflation (including unfavorable commodity