Conagra Brands Inc
Q4 2025 Earnings
Market Reaction
S&P 500 over the same 30 days: +1.61%.
Did CAG Beat Earnings? Q4 2025 Results
Conagra Brands delivered a disappointing close to fiscal 2025, with fourth-quarter results missing on both the top and bottom lines as the packaged food giant continued to wrestle with softening consumer demand and mounting cost pressures. Adjusted EPS came in at $0.56, falling short of the $0.58 consensus estimate by 3.45%, while net sales declined 4.3% year-over-year to $2.78 billion, also missing the $2.88 billion Wall Street expected by 3.45%. The shortfall was driven in large part by a 12.1% drop in gross profit to $707.20 million, as cost of goods sold inflation and unfavorable operating leverage overwhelmed productivity gains, compressing adjusted gross margin by 184 basis points to 25.8%. Shares fell to their lowest level since 2012 in the aftermath. The pain is unlikely to ease quickly; fiscal 2026 guidance calls for adjusted EPS of just $1.70 to $1.85, reflecting approximately 7% total COGS inflation, including an estimated 3% tariff-related impact on tin plate steel, aluminum, and Chinese goods, with organic net sales expected to range from -1% to 1%.
- Volume declines of 2.5% driven by lower consumption trends
- Negative price/mix impact of 1.0%
- Higher than expected COGS inflation offsetting productivity gains
- Unfavorable foreign exchange impact of 0.6%
- Lower incentive compensation reducing SG&A
- Volume share gains in frozen desserts, microwave popcorn, refrigerated whipped topping, and pudding
- Ardent Mills joint venture delivered 30.9% increase in adjusted equity method investment earnings
“I'm proud of the Conagra team for their hard work throughout fiscal 2025 as we navigated an environment that proved to be more challenging than we anticipated. We entered the year focused on returning volume to growth and delivered consistent progress through the first half. This resulted in a return to absolute volume growth in domestic retail in the second quarter, best-in-class market share performance, and first half EPS in line with our plan. While the second half was impacted by higher than expected inflation, foreign exchange headwinds, and supply constraints, our long-term value creation strategy remains unchanged.”
Conagra Brands CEO, on the earnings call
Forward Guidance & Outlook
For fiscal 2026, Conagra guides organic net sales growth of -1% to 1%, adjusted operating margin of ~11.0% to ~11.5%, and adjusted EPS of $1.70 to $1.85. The company expects total COGS inflation of approximately 7%, comprising ~4% core inflation plus ~3% from U.S. tariffs (50% on tin plate steel and aluminum, 30% on limited China imports, 10% reciprocal rate on certain other countries). Mitigating actions include accelerated cost savings, sourcing alternatives, and targeted pricing. Additional guidance includes interest expense of ~$400M, equity earnings of ~$200M, adjusted effective tax rate of ~23%, pension income of ~$25M, capex of ~$450M, free cash flow conversion of ~90%, and net leverage ratio of ~3.85x. The 53rd week is expected to add $0.05 to adjusted EPS.
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Figures from SEC filings and company reports. Not investment advice.