ConAgra Brands, Inc. (NYSE:CAG) stock fell Friday after the company posted a mixed quarter.
The packaged-food maker topped profit expectations but missed on revenue, while reaffirming its full-year outlook amid tariff pressure.
The company reported second-quarter adjusted earnings per share of 45 cents, beating the analyst consensus estimate of 44 cents.
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Quarterly sales of $2.979 billion missed the Street view $2.986 billion.
Net sales fell 6.8%, reflecting a 3.9% hit from M&A, a 3.0% organic decline, and a 0.1% lift from favorable foreign exchange.
Net sales were impacted by an approximately 100 basis point headwind, driven by changes in retailer purchasing activity around quarter-end, including the timing of retailer merchandising events and associated inventory builds.
Segment Performance
Grocery & Snacks net sales decreased 8.5% to $1.2 billion in the quarter.
Net sales for the Refrigerated & Frozen segment decreased 6.5% to $1.3 billion in the quarter.
International segment slumped 5.4% to $230 million in the quarter.
Net sales for the Foodservice segment decreased 1.3% to $288 million.
Metrics
Adjusted operating profit margin in the quarter under review was 11.3%, lower than 15.3% a year ago.
Adjusted gross profit decreased 17.1% to $698 million as productivity was more than offset by lower net sales. Adjusted gross margin decreased 292 basis points to 23.4%.
Adjusted EBITDA, which includes adjusted equity method investment earnings and pension and postretirement non-service income, decreased 25.2% to $478 million in the quarter, primarily driven by the decrease in adjusted gross profit.
For the first half of fiscal 2026, the company generated $331 million in net cash flows from operating activities compared to $754 million in the prior year period.
Outlook
ConAgra reaffirmed its fiscal 2026 adjusted EPS guidance of $1.70 to $1.85, compared with the $1.75 analyst estimate.
The company also reaffirmed its fiscal 2026 guidance for organic net sales, projecting a change between a 1% decline and flat growth compared to fiscal 2025. ConAgra also maintained its adjusted operating margin outlook at about 11.0% to 11.5%.
The company expects the cost-of-goods-sold inflation to continue at an elevated level in fiscal 2026. Guidance anticipates core inflation slightly higher than 4%.
ConAgra said previously announced U.S. tariffs could lift fiscal 2026 cost of goods sold by about 3%, assuming higher duties on tin plate steel, aluminum, and certain China imports.
The firm said it expects total fiscal 2026 cost-of-goods-sold inflation of about 7%, factoring in tariffs, cost savings initiatives, and pricing actions.
CAG Price Action: Conagra Brands shares were down 3.48% at $17.18 at the time of publication on Friday, according to Benzinga Pro data.
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