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Conagra Q4 Earnings Miss Estimates, Sales Decline 4.3% Y/Y
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Key Takeaways
CAG's Q4 net sales fell 4.3% to $2.78B and EPS dropped 8.2%, both missing consensus estimates.
Organic sales declined 3.5% due to softer demand, lower volume and unfavorable price/mix.
CAG expects FY26 EPS of $1.70-$1.85 and organic sales growth between -1% and 1%.
Conagra Brands, Inc. (CAG - Free Report) posted fourth-quarter fiscal 2025 results, wherein both the top and bottom lines missed the Zacks Consensus Estimate. Both net sales and earnings experienced year-over-year declines.
The company faced tougher-than-expected conditions in fiscal 2025 but noted progress in restoring volume growth, especially in domestic retail. Despite inflation, currency and supply challenges in the second half, the company’s long-term strategy remains solid. For fiscal 2026, Conagra will focus on snacks and frozen foods, supply-chain resilience and cost discipline to drive sustainable growth.
CAG’s Quarterly Performance: Key Metrics and Insights
Conagra’s quarterly adjusted earnings per share (EPS) were 56 cents, which missed the Zacks Consensus Estimate of 59 cents. Additionally, the bottom line declined 8.2% year over year. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
The company generated net sales of $2,781.8 million, which declined 4.3% year over year, missing the Zacks Consensus Estimate of $2,844 million. The top-line decline resulted from a decrease in organic net sales, adverse currency movements and an unfavorable impact of M&A.
Organic net sales decreased 3.5% year over year due to a 1% negative impact from price/mix and a 2.5% decrease in volume, primarily due to softer consumption trends. Despite this, Conagra gained volume share in key categories such as frozen desserts, microwave popcorn, refrigerated whipped topping and pudding.
The adjusted gross profit declined 10.7% to $717 million, as productivity gains were outweighed by lower sales, cost inflation and unfavorable operating leverage. The adjusted gross margin contracted 184 basis points (bps) to 25.8%. We estimated a 24.8% adjusted gross margin.
Adjusted SG&A expenses, excluding advertising and promotional costs, decreased 10.8% year over year to $333 million due to lower incentive compensation.
Adjusted EBITDA (including equity method investment earnings, and pension and post-retirement non-service income) was $544 million, down 5.7% year over year.
Decoding CAG’s Segmental Performance
Grocery & Snacks: Quarterly net sales in the segment were $1,150.2 million, which was down 2.1% year over year and missed our estimate of $1,245.4 million. M&A contributed a 1.2% sales boost, while organic sales declined 3.3%, caused by a 1.6% drop in volume and a 1.7% decrease in price/mix.
Refrigerated & Frozen: Net sales and organic sales decreased 4.4% year over year to $1,121.8 million, slightly beating our estimate of $1,115.6 million. The price/mix fell 2.3%, while volume decreased 2.1%.
International: Net sales declined 13.8% year over year to $230.1 million, beating our estimate of $223.9 million. Organic net sales increased 0.8%. M&A had a 7.3% negative effect on sales and adverse currency effects impacted the metric by 7.3%. Organic sales included a 4.7% increase in the price/mix and a volume decline of 3.9%.
Foodservice: Reported sales were $279.7 million, down 4% year over year but up from our estimate of $256.1 million. Organic sales fell 4.3% and M&A positively contributed 0.3% to reported sales. The price/mix improved 3.3%, whereas volumes declined 7.6%.
CAG’s Financial Health Snapshot
The company exited the quarter with cash and cash equivalents of $68 million, senior long-term debt (excluding current installments) of $6,234.1 million and total stockholders’ equity of $8,932.7 million.
For fiscal 2025, Conagra generated $1,691.9 million in net cash flows from operating activities, with capital expenditures amounting to $389.3 million. The company generated a free cash flow of $1,302.6 million.
Conagra also declared a quarterly dividend of 35 cents per share, payable on Aug. 28, 2025, to its shareholders of record as of July 30, reflecting an annualized dividend of $1.40.
What to Expect From CAG in FY26?
For fiscal 2026, the company expects negative 1% to positive 1% in organic net sales growth. The adjusted operating margin is anticipated between 11% and 11.5%, while adjusted earnings are forecasted between $1.70 and $1.85 per share, down from $2.30 in fiscal 2025. Capital expenditure is likely to be around $450 million.
Shares of this Zacks Rank #5 (Strong Sell) company have tumbled 23.7% in the past three months compared with the industry’s decline of 2%.
The consensus estimate for Post Holdings’ current fiscal-year earnings implies growth of 5.7% from the year-ago figures. POST delivered a trailing four-quarter earnings surprise of 22.9%, on average.
TreeHouse Foods, Inc. (THS - Free Report) manufactures and distributes private brands snacks and beverages in the United States and internationally and presently flaunts a Zacks Rank of 1. THS delivered a trailing four-quarter earnings surprise of 58.8%, on average.
The Zacks Consensus Estimate for TreeHouse Foods’ current financial-year sales indicates growth of 0.4% from the year-ago numbers.
BRF S.A. (BRFS - Free Report) raises, produces and slaughters poultry and pork for processing, production and sale of fresh meat, processed products, pasta, margarine, pet food and other products. It currently carries a Zacks Rank of 2 (Buy). BRFS delivered a trailing four-quarter earnings surprise of 5.4%, on average.
The Zacks Consensus Estimate for BRF S.A.'s current fiscal-year sales and earnings indicates growth of 11.1% and 8.33%, respectively, from the prior-year levels.
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Conagra Q4 Earnings Miss Estimates, Sales Decline 4.3% Y/Y
Key Takeaways
Conagra Brands, Inc. (CAG - Free Report) posted fourth-quarter fiscal 2025 results, wherein both the top and bottom lines missed the Zacks Consensus Estimate. Both net sales and earnings experienced year-over-year declines.
The company faced tougher-than-expected conditions in fiscal 2025 but noted progress in restoring volume growth, especially in domestic retail. Despite inflation, currency and supply challenges in the second half, the company’s long-term strategy remains solid. For fiscal 2026, Conagra will focus on snacks and frozen foods, supply-chain resilience and cost discipline to drive sustainable growth.
CAG’s Quarterly Performance: Key Metrics and Insights
Conagra’s quarterly adjusted earnings per share (EPS) were 56 cents, which missed the Zacks Consensus Estimate of 59 cents. Additionally, the bottom line declined 8.2% year over year. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)
Conagra Brands Price, Consensus and EPS Surprise
Conagra Brands price-consensus-eps-surprise-chart | Conagra Brands Quote
The company generated net sales of $2,781.8 million, which declined 4.3% year over year, missing the Zacks Consensus Estimate of $2,844 million. The top-line decline resulted from a decrease in organic net sales, adverse currency movements and an unfavorable impact of M&A.
Organic net sales decreased 3.5% year over year due to a 1% negative impact from price/mix and a 2.5% decrease in volume, primarily due to softer consumption trends. Despite this, Conagra gained volume share in key categories such as frozen desserts, microwave popcorn, refrigerated whipped topping and pudding.
The adjusted gross profit declined 10.7% to $717 million, as productivity gains were outweighed by lower sales, cost inflation and unfavorable operating leverage. The adjusted gross margin contracted 184 basis points (bps) to 25.8%. We estimated a 24.8% adjusted gross margin.
Adjusted SG&A expenses, excluding advertising and promotional costs, decreased 10.8% year over year to $333 million due to lower incentive compensation.
Adjusted EBITDA (including equity method investment earnings, and pension and post-retirement non-service income) was $544 million, down 5.7% year over year.
Decoding CAG’s Segmental Performance
Grocery & Snacks: Quarterly net sales in the segment were $1,150.2 million, which was down 2.1% year over year and missed our estimate of $1,245.4 million. M&A contributed a 1.2% sales boost, while organic sales declined 3.3%, caused by a 1.6% drop in volume and a 1.7% decrease in price/mix.
Refrigerated & Frozen: Net sales and organic sales decreased 4.4% year over year to $1,121.8 million, slightly beating our estimate of $1,115.6 million. The price/mix fell 2.3%, while volume decreased 2.1%.
International: Net sales declined 13.8% year over year to $230.1 million, beating our estimate of $223.9 million. Organic net sales increased 0.8%. M&A had a 7.3% negative effect on sales and adverse currency effects impacted the metric by 7.3%. Organic sales included a 4.7% increase in the price/mix and a volume decline of 3.9%.
Foodservice: Reported sales were $279.7 million, down 4% year over year but up from our estimate of $256.1 million. Organic sales fell 4.3% and M&A positively contributed 0.3% to reported sales. The price/mix improved 3.3%, whereas volumes declined 7.6%.
CAG’s Financial Health Snapshot
The company exited the quarter with cash and cash equivalents of $68 million, senior long-term debt (excluding current installments) of $6,234.1 million and total stockholders’ equity of $8,932.7 million.
For fiscal 2025, Conagra generated $1,691.9 million in net cash flows from operating activities, with capital expenditures amounting to $389.3 million. The company generated a free cash flow of $1,302.6 million.
Conagra also declared a quarterly dividend of 35 cents per share, payable on Aug. 28, 2025, to its shareholders of record as of July 30, reflecting an annualized dividend of $1.40.
What to Expect From CAG in FY26?
For fiscal 2026, the company expects negative 1% to positive 1% in organic net sales growth. The adjusted operating margin is anticipated between 11% and 11.5%, while adjusted earnings are forecasted between $1.70 and $1.85 per share, down from $2.30 in fiscal 2025. Capital expenditure is likely to be around $450 million.
Shares of this Zacks Rank #5 (Strong Sell) company have tumbled 23.7% in the past three months compared with the industry’s decline of 2%.
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Some Solid Bets
Post Holdings, Inc. (POST - Free Report) operates as a consumer-packaged goods holding company in the United States and internationally. It currently sports a Zacks Rank of 1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus estimate for Post Holdings’ current fiscal-year earnings implies growth of 5.7% from the year-ago figures. POST delivered a trailing four-quarter earnings surprise of 22.9%, on average.
TreeHouse Foods, Inc. (THS - Free Report) manufactures and distributes private brands snacks and beverages in the United States and internationally and presently flaunts a Zacks Rank of 1. THS delivered a trailing four-quarter earnings surprise of 58.8%, on average.
The Zacks Consensus Estimate for TreeHouse Foods’ current financial-year sales indicates growth of 0.4% from the year-ago numbers.
BRF S.A. (BRFS - Free Report) raises, produces and slaughters poultry and pork for processing, production and sale of fresh meat, processed products, pasta, margarine, pet food and other products. It currently carries a Zacks Rank of 2 (Buy). BRFS delivered a trailing four-quarter earnings surprise of 5.4%, on average.
The Zacks Consensus Estimate for BRF S.A.'s current fiscal-year sales and earnings indicates growth of 11.1% and 8.33%, respectively, from the prior-year levels.