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Investing.com -- ConAgra Brands, Inc. reported third-quarter fiscal 2025 results that fell short of analyst expectations, sending shares down 2.2% in early trading.
The packaged food company posted adjusted earnings per share of $0.51, missing the consensus estimate of $0.54. Revenue declined 6.3% year-over-year to $2.84 billion, below analysts’ projections of $2.92 billion. Organic net sales decreased 5.2% in the quarter.
ConAgra’s CEO Sean Connolly said the quarter "unfolded largely as expected" with strong consumption trends, but noted that shipments lagged consumption due to previously announced supply constraints. He added that the company is making progress in restoring inventory and improving customer service levels.
The company maintained its fiscal 2025 guidance, projecting adjusted EPS of approximately $2.35, slightly below the $2.36 consensus estimate. ConAgra expects organic net sales to decline about 2% compared to fiscal 2024.
Gross margin contracted 331 basis points to 25% in the quarter as productivity gains were more than offset by lower sales, cost inflation, and unfavorable operating leverage. Adjusted operating margin fell 369 basis points to 12.7%.
"We continue to monitor the dynamic external environment while remaining focused on execution," Connolly stated.
ConAgra’s Refrigerated & Frozen segment, its second-largest by revenue, saw sales decline 7.2% to $1.1 billion, impacted by supply constraints in frozen meals containing chicken and frozen vegetable products.
The company ended the quarter with net debt of $8.1 billion, down 5.9% from the prior year, resulting in a net leverage ratio of 3.59x.