Conagra Brands (CAG) Stock Falls After Earnings Miss and Tightened Annual Profit Forecast

TLDR

• Conagra reported Q3 adjusted EPS of $0.39, missing the $0.40 estimate
• Revenue of $2.79 billion beat expectations of $2.76 billion
• Full-year adjusted EPS guidance narrowed to ~$1.70, the low end of prior range
• Organic net sales rose 2.4%, driven by Frozen and Snacks segments
• Cost of goods sold inflation expected to hit ~7% for the full fiscal year, including tariff costs

Conagra Brands (CAG) missed the bottom line in its third-quarter results but managed to top revenue forecasts. The food company posted adjusted EPS of $0.39 against a $0.40 consensus estimate. Revenue came in at $2.79 billion, ahead of the $2.76 billion analysts had penciled in.

Conagra Brands, Inc., CAG

Net sales fell 1.9% year-over-year. That said, organic net sales grew 2.4%, helped by a 1.9% price/mix lift and a 0.5% volume gain.

The Refrigerated & Frozen segment was the standout. Organic net sales there rose 3.6%, with volume up 3.9% as the business recovered market share lost during last year’s supply issues.

The Grocery & Snacks segment posted 1.8% organic net sales growth. Foodservice came in at 3.6%.

Volume gains were seen in frozen single serve meals, frozen vegetables, meat snacks, and hot cocoa.

Margins Under Pressure

Adjusted gross margin slipped 112 basis points to 23.7%. Higher organic sales and productivity savings weren’t enough to offset rising input costs.

Cost of goods sold inflation is now expected to reach approximately 7% for the full fiscal year, factoring in tariff expenses. Adjusted net income dropped 22.3% to $188 million.

Adjusted operating margin reached 10.6% in Q3. Conagra expects the full-year figure to land near the high end of its 11.0%–11.5% range.

Guidance Tightened at the Low End

Conagra narrowed its full-year adjusted EPS guidance to approximately $1.70. That’s the floor of its previous $1.70 to $1.85 range — not exactly a confidence booster, but the company isn’t walking it back entirely either.

The company now expects annual net sales at the midpoint of its previous forecast, which called for a range between a 1% decline and a 1% rise.

Higher input costs have been a recurring headache. Conagra had planned price increases to offset rising costs in ingredients like cocoa, olive oil, and palm oil, as well as tariffs on tin-plate steel.

Budget-conscious consumers cutting back on spending and shifting toward cheaper brands have made that a trickier equation. The broader trend toward healthier eating, partly driven by rising use of weight-loss drugs, has also weighed on food company revenues.

Full-year cost of goods sold inflation, including tariff expenses, is expected to come in at approximately 7%.

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