Conagra Brands Inc
Q1 2027 Earnings
Market Reaction
S&P 500 over the same 30 days: +2.85%.
Did CAG Beat Earnings? Q1 2027 Results
Conagra Brands delivered a narrow but meaningful beat in its fiscal fourth quarter, posting adjusted EPS of $0.47 against a consensus estimate of $0.46, a 2.17% positive surprise, even as a staggering $2.00 billion in non-cash goodwill and brand impairment charges drove a GAAP net loss of $1.62 billion. Net sales of $2.88 billion grew 3.6% year-over-year, though that headline figure was heavily flattered by a 7.7% boost from a 53rd week, while organic net sales came in essentially flat as a 1.6% gain in price/mix was fully offset by equivalent volume declines. New CEO John Brase, stepping into his first earnings call amid investor scrutiny over the company's trajectory, also confirmed the dividend would be halved to an annualized $0.70 per share, a move widely anticipated given net debt of $7.05 billion at 3.83x adjusted EBITDA. Looking ahead, Conagra guided fiscal 2027 adjusted EPS to a range of $1.40 to $1.50, with organic net sales expected to decline between 1% and 3% and adjusted operating margin contracting to a 10.0% to 10.5% range.
- Organic net sales approximately flat in Q4 with 1.6% positive price/mix offset by 1.6% volume decline
- Productivity gains and approximately $6 million in tariff refunds partially offset COGS inflation
- 53rd week contributed 7.7% to reported net sales growth in Q4
- Volume share gains in frozen single-serve meals, frozen multi-serve meals, frozen vegetables, meat snacks, seeds, and pudding
- $2.0 billion non-cash goodwill and brand impairment charges triggered by sustained decline in share price and market capitalization
- COGS inflation and unfavorable operating leverage pressured margins across all segments
- Net debt reduced 11.9% year-over-year to $7.1 billion
- Q4 adjusted EBITDA declined 11.0% year-over-year to $484.4 million
- Full-year adjusted EBITDA declined 17.3% to $1,840.4 million from $2,224.6 million
“I am honored to step into the role of CEO and energized by the opportunities ahead. Conagra has an exceptional portfolio of iconic brands, talented employees, strong customer relationships, and leading positions in attractive categories. In fiscal 2026, our team delivered results within our guidance ranges, navigating a dynamic operating environment while demonstrating the resilience of our business and disciplined execution across the organization.”
Conagra Brands CEO, on the earnings call
Forward Guidance & Outlook
For fiscal 2027, Conagra guides organic net sales change of (3)% to (1)% compared to fiscal 2026, adjusted operating margin between 10.0% and 10.5%, and adjusted EPS between $1.40 and $1.50. Key assumptions include equity earnings contribution of approximately $140 million, pension income of approximately $25 million, interest expense of approximately $360 million, adjusted effective tax rate of approximately 24%, capital expenditures of approximately $550 million, free cash flow conversion of greater than 90%, and net leverage ratio at fiscal year end of approximately 4.0x.
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Figures from SEC filings and company reports. Not investment advice.