Conagra Brands Q3 Results Miss Estimates

ConAgra Foods

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(RTTNews) - Branded food company Conagra Brands, Inc. (CAG) reported Wednesday that profit for the first quarter more than halved from last year, reflecting contracting gross margins and net sales decline across its operating segments. Adjusted earnings per share and quarterly revenues also missed analysts' estimates. The company reaffirmed its outlook for the full-year 2025.

In the pre-market trading on Thursday, Conagra is trading on the NYSE at $25.85, down $0.53 or 2.01 percent.

"Our third quarter unfolded largely as expected since our update in February at CAGNY, with strong consumption trends and share performance reflecting the continued resilience of our brands," said Sean Connolly, president and CEO.

For the third quarter, net income attributable to Conagra more than halved to $145.1 million or $0.30 per share from $308.6 million or $0.64 per share in the prior-year quarter.

Excluding one-time items, adjusted net earnings were $0.51 per share, compared to $0.69 per share in the year-ago quarter.

On average, 14 analysts polled expected the company to report earnings of $0.53 per share for the quarter. Analysts' estimates typically exclude special items.

Net Sales for the quarter declined 6.3 percent to $2.84 billion from $3.03 billion in the same quarter last year. Analysts expected revenues of $2.90 billion for the quarter.

Organic sales decreased 5.2 percent, reflecting a 2.1 percent negative impact from price/mix, driven by increase in strategic investments at the domestic retail business, and a 3.1 percent decrease in volume.

Net sales for the Grocery & Snacks segment declined 3.2 percent to $1.2 billion, net sales for the Refrigerated & Frozen segment decreased 7.2 percent to $1.1 billion, net sales for the International segment declined 17.6 percent to $224 million and net sales for the Foodservice segment decreased 6.1 percent to $256 million from last year.

Gross profit decreased 331 basis points to 25.0 percent, and adjusted gross margin decreased 389 basis points to 24.8 percent as productivity was more than offset by lower net sales, and unfavorable operating leverage.

On Wednesday, Conagra announced that its Board of Directors approved a quarterly dividend payment of $0.35 per share of CAG common stock, payable on May 29, 2025 to stockholders of record as of the close of business on April 28, 2025. Conagra Brands, Inc. has paid consecutive quarterly dividends since January 1976.

Looking ahead to fiscal 2025, the company continues to project adjusted earnings of about $2.35 per share on organic net sales decline of 2.0 percent.

The Street is looking for earnings of $2.35 per share on a revenue decline of 2.37 percent to $11.76 billion for the year.

The company also expects capital expenditures to be approximately $410 million for the year.

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