Conagra Brands meets earnings expectations amid challenging consumer environment
CHICAGO - On Friday, Conagra Brands, Inc. (NYSE:CAG) reported second-quarter fiscal 2026 adjusted earnings that slightly exceeded analyst expectations, while revenue fell just short of estimates as the packaged food giant navigated a difficult consumer environment.
The company’s stock edged down 0.11% in pre-market trading following the announcement.
The Chicago-based food manufacturer posted adjusted earnings per share of $0.45, narrowly beating the analyst consensus of $0.44. Revenue came in at $2.98 billion, slightly below the $2.99 billion analysts had expected and representing a 6.8% decrease from the same period last year. Organic net sales declined 3.0% as volume decreased by 3.0% while price/mix remained flat.
Despite the revenue challenges, Conagra reaffirmed its full-year fiscal 2026 guidance, projecting organic net sales to range between a 1% decrease and a 1% increase compared to fiscal 2025. The company expects adjusted earnings per share between $1.70 and $1.85, compared to the analyst consensus of $1.85.
"While we continued to navigate a challenging consumer environment in the second quarter, I am pleased with the continued underlying momentum we are seeing across the business," said Sean Connolly, president and chief executive officer of Conagra Brands. "As we look ahead to the second half, we are well positioned to return to organic net sales growth supported by a robust innovation pipeline, increased merchandising and A&P investment, and a resilient supply chain."
The company’s adjusted operating margin was 11.3% for the quarter, down from 15.3% in the prior year period. Conagra reported that it gained overall volume share in its snacks categories, including ready-to-eat popcorn, pudding, hot cocoa, and seeds, as well as in refrigerated whipped toppings, frozen desserts, and frozen breakfast.
Conagra noted that its net sales were impacted by an approximately 100 basis point headwind driven by changes in retailer purchasing activity around quarter end, including timing of retailer merchandising events and associated inventory builds.
The company reduced its net debt by 10.1% versus the prior year period to $7.6 billion, resulting in a 3.83x net leverage ratio at the end of the quarter.
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