Conagra Brands Inc
Q1 2026 Earnings
Market Reaction
S&P 500 over the same 30 days: +2.04%.
Did CAG Beat Earnings? Q1 2026 Results
Conagra Brands delivered a stronger-than-expected first quarter of fiscal 2026, posting adjusted EPS of $0.39 against a consensus estimate of $0.33, a beat of 17.40%, even as the packaged food giant navigated meaningful top-line headwinds. Revenue of $2.63 billion edged past the $2.62 billion estimate, though it still represented a 5.8% year-over-year decline, with the bulk of that drop tied to the divestiture of Chef Boyardee and frozen seafood businesses, which alone created a 5.1% drag on reported net sales. Profitability remained under pressure, with adjusted gross margin contracting 153 basis points to 24.4% as COGS inflation and lost profit from divested units weighed on results. Looking ahead, Conagra reaffirmed its full-year adjusted EPS guidance of $1.70 to $1.85 and organic sales growth of -1% to 1%, though the company flagged total COGS inflation in the low 7% range, incorporating roughly 3 percentage points of tariff-related cost pressure on materials including tin plate steel and aluminum, ahead of any mitigating actions.
- Divestitures of Chef Boyardee and frozen seafood businesses created 5.1% net sales headwind
- Organic net sales declined 0.6% driven by 1.2% volume decrease partially offset by 0.6% favorable price/mix
- COGS inflation and lost profit from divested businesses pressured margins significantly
- Productivity gains partially offset cost inflation but were insufficient to maintain prior-year profitability
- Volume share gains in frozen desserts, refrigerated whipped topping, hot dogs, pudding, canned tomatoes, and frozen multi-serve meals
- Hebrew National volume benefited from lapping prior-year supply constraints
- Net debt reduced 12.3% year-over-year to $7.6 billion
- Higher incentive compensation drove increased SG&A
“I am pleased by the solid progress we made in the first quarter with top line improvement and continued strategic execution across our portfolio. We successfully delivered on key supply chain objectives, fully restored service levels, and advanced our portfolio reshaping which enabled us to further reduce net debt. While the operating environment remains dynamic with ongoing inflationary pressure and cautious consumer sentiment, our focus remains on disciplined execution and balanced capital allocation. Today, we are reaffirming our fiscal 2026 guidance.”
Conagra Brands CEO, on the earnings call
Forward Guidance & Outlook
Conagra reaffirmed its fiscal 2026 guidance: organic net sales growth of -1% to 1% vs. fiscal 2025, adjusted operating margin of ~11.0% to ~11.5%, and adjusted EPS of $1.70 to $1.85. The company now expects interest expense of approximately $390 million and an adjusted effective tax rate of approximately 24%. Total COGS inflation is expected in the low 7% range, consisting of core inflation slightly above 4% plus an approximately 3% impact from U.S. tariffs (50% on tin plate steel and aluminum, 30% on limited China imports, plus various reciprocal rates), prior to mitigating actions including accelerated cost savings, sourcing alternatives, and targeted pricing.
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Figures from SEC filings and company reports. Not investment advice.