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Investing.com -- Conagra Brands, Inc. shares fell 3.8% Thursday after the food company missed analyst expectations for its fourth quarter and issued weaker-than-expected guidance for fiscal 2026.
The Chicago-based packaged food giant reported adjusted earnings per share of $0.56 for the fourth quarter, falling short of the $0.59 analyst consensus. Revenue declined 4.3% to $2.78 billion, below the $2.85 billion analysts had expected. Organic net sales decreased 3.5% in the quarter, driven by a 1% negative impact from price/mix and a 2.5% decrease in volume.
For fiscal 2026, Conagra provided disappointing guidance, projecting adjusted EPS of $1.70 to $1.85, significantly below the analyst consensus of $2.19. The company expects organic net sales growth between -1% and 1% compared to fiscal 2025, with adjusted operating margin between approximately 11.0% and 11.5%.
"I’m proud of the Conagra team for their hard work throughout fiscal 2025 as we navigated an environment that proved to be more challenging than we anticipated," said Sean Connolly, president and CEO of Conagra Brands (NYSE:CAG). "While the second half was impacted by higher than expected inflation, foreign exchange headwinds, and supply constraints, our long-term value creation strategy remains unchanged."
The company cited continued inflationary pressures as a major headwind for the upcoming fiscal year, expecting core inflation of approximately 4%. Additionally, Conagra anticipates a significant impact from recently announced U.S. tariffs, which could increase cost of goods sold by approximately 3% annually before mitigating actions.
For the full fiscal 2025, Conagra’s net sales decreased 3.6% to $11.6 billion, with adjusted EPS declining 13.9% to $2.30. The company generated $1.7 billion in net cash flows from operating activities and reduced its net debt by 4.4% to $8.0 billion.