Conagra Brands has reported results for the second quarter of the fiscal year 2021, which ended on November 29, 2020, highlighting a 6.2% increase in net sales.
Net sales increased 6.2% to USD3.0bn, while the 8.1% increase in organic net sales was driven by a 6.6% increase in volume and a favorable price/mix impact of 1.5%. The volume increase was primarily driven by consumers increasing their at-home food consumption as a result of the COVID-19 pandemic, which benefitted the Company’s retail segments but negatively impacted the Foodservice segment. The price/mix favorability was primarily driven by a favorable sales mix, according to the company.
Gross profit increased 11.4% to USD889m in the quarter, and adjusted gross profit increased 11.4% to USD895m. Gross margin increased 139 basis points to 29.7% in the quarter, and adjusted gross margin increased 139 basis points to 29.9%.
Adjusted EBITDA, which includes equity method investment earnings and pension and postretirement non-service income, increased 16.7% to USD712m in the quarter, primarily driven by the increase in adjusted gross profit.
“Our second-quarter results reflect strong performance across the business and outstanding execution delivered by employees across the company. We exceeded expectations on net sales, profitability, and de-leveraging while continuing to invest in the business. We have continued to selectively invest in production capacity and marketing support to increase the availability and awareness of our products to maximize long-term brand health”, Sean Connolly, president and chief executive officer of Conagra Brands said. “We remain confident that Conagra Brands is well-positioned to capture the benefits of shifting consumer behavior, many of which we believe will continue well into the future. The continued business momentum, coupled with our disciplined approach to investment, reinforce our confidence in the long-term potential of the business and our ability to create sustained value for our shareholders.”