Conagra Brands Inc Earnings for Q1 Fiscal 2026
Conagra Brands, Inc. (NYSE: CAG) reported its first-quarter earnings for fiscal year 2026, which concluded on August 24, 2025. The report shows a challenging yet strategically resilient quarter for the company, demonstrating its agility and commitment to strategic execution amid economic headwinds.
Conagra Brands Inc Q1 Results
The company saw a decline in several key metrics throughout the quarter:
| Metric | Q1 Fiscal 2026 | Q1 Fiscal 2025 | Year-over-Year Change |
|---|---|---|---|
| Net Sales | $2.6 billion | $2.75 billion | -5.8% |
| Reported EPS | $0.34 | $0.97 | -64.9% |
| Adjusted EPS | $0.39 | $0.53 | -26.4% |
| Gross Profit | $641 million | $740 million | -13.4% |
| Adjusted Gross Profit | $644 million | $726 million | -11.3% |
| Operating Margin | 13.2% | 14.3% | -1.18 percentage |
Revenue Breakdown by Segment
Conagra’s revenue performance in its major segments was varied, reflecting diverse operational challenges:
| Segment | Q1 Fiscal 2026 Net Sales | Year-over-Year Change |
|---|---|---|
| Grocery & Snacks | $1.1 billion | -8.7% |
| Refrigerated & Frozen | $1.1 billion | -0.9% |
| International | $212 million | -18.0% |
| Foodservice | $264 million | -0.8% |
Grocery & Snacks Segment: This segment saw an 8.7% decrease, primarily due to an unfavorable M&A impact of 7.7% and a 1.0% decline in organic net sales, as product mix improvements were offset by lower volumes.
Refrigerated & Frozen Segment: While this segment only saw a slight decrease in total sales, there was a 0.2% increase in organic net sales driven by a volume increase of 0.5%, which offsets some adverse effects from past supply constraints, though operating profits fell steeply by 35.8%.
International Segment: The sharp decline in the International segment was mainly due to a 13.2% impact from M&A activities, with a 3.5% fall in organic net sales exacerbated by unfavorable foreign exchange impacts.
Foodservice Segment: Despite the nearly flat net sales change, this segment managed a 3.8% increase in price/mix, compensating for a drop in volume. The overall segment performance reflects the external challenges facing this segment of the business.
Key Developments for the Quarter
Conagra’s performance was notably affected by significant cost pressures and strategic restructuring activities. The company successfully achieved major supply chain objectives, completely restoring service levels and strategically reshaping its portfolio, allowing for a meaningful reduction in net debt.
The operating environment remained quite dynamic, with layered complexities such as ongoing inflationary pressure and cautious consumer sentiment, which Conagra addressed through balanced capital allocation and rigorous strategic execution.
Executive Insights
Sean Connolly, president, and CEO of Conagra Brands, expressed satisfaction with the company's progress, stating, "Despite a dynamic operating environment, we continue showcasing our discipline in execution and all-rounded strategic approach, allowing us to reaffirm our fiscal 2026 guidance."
Dividends and Share Repurchases
During the quarter, Conagra maintained its dividend payout of $0.35 per share, demonstrating its sustained commitment to returning value to shareholders. There were $15 million worth of share repurchases, which reflects a proactive approach to capital management.
Conagra Brands Inc Stock Forecast
Given the stable fundamental performance in several key areas despite external pressures, Conagra’s stock is likely to reflect cautious optimism in the coming quarters. Projections for the company's stock could range from $1.70 at the lower end to $1.85 at the higher end per share. These estimates factor in the company's strategic adjustments, robust brand portfolio, and firm control over capital deployment, notwithstanding ongoing market challenges.
Conclusion
Conagra Brands Inc. has demonstrated comprehensive strategic execution and resilience in overcoming persistent economic and market challenges. Despite a dip in revenue and profits, the company’s proactive approaches to cost management and portfolio reshaping continue to set a foundation for future growth. Investors and stakeholders can look forward to seeing the impact of the company's robust fiscal 2026 guidance, promising a period of disciplined capital allocation and targeted strategic pivots.
