ConAgra Brands, Inc. ( CAG ) shares slid Thursday after the company posted disappointing Q4 results and issued a cautious outlook for fiscal 2026.

Conagra Brands ( CAG ) has a diverse portfolio of popular food products, including frozen meals, snacks, and pantry staples. Some of their most recognized brands are Birds Eye, Healthy Choice, Marie Callender’s, Reddi-wip, Slim Jim, and Hunt’s.

The company reported adjusted earnings per share of 56 cents, missing the analyst consensus estimate of 58 cents. Quarterly net sales of $2.78 billion, missed the Street view of $2.83 billion.

The company reported a 4.3% decline in net sales, with organic net sales falling 3.5% year-over-year. The decrease in organic net sales was driven by a 1% negative impact from price/mix and a 2.5% decrease in volume, primarily due to lower consumption trends.

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Net sales for the Grocery & Snacks segment declined 2.1% to $1.2 billion, while the Refrigerated & Frozen segment saw a 4.4% drop to $1.1 billion, both on a reported and organic basis. The International segment's net sales fell 13.8% to $230 million, and the Foodservice segment recorded a 4.0% decline to $280 million for the quarter.

“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,” said Sean Connolly, president and chief executive officer of Conagra Brands ( CAG ).

Adjusted gross profit decreased 10.7% to $717 million versus the prior year as productivity was more than offset by lower net sales, the negative impact of cost of goods sold inflation, and unfavorable operating leverage. Adjusted gross margin decreased 184 basis points to 25.8%.

Adjusted EBITDA, which includes equity method investment earnings and pension and postretirement non-service income, was $544 million in the quarter, down 5.7% year over year.

“In fiscal 2026, we expect elevated inflation and macroeconomic uncertainty to persist but remain focused on proactively managing the business by investing in our high-potential frozen and snacks domains, prioritizing volume strength, and further enhancing supply chain resiliency while continuing disciplined cost management and focus on cash flow,” Connolly added. 

The company exited the quarter with cash and equivalents worth $68 million, and inventories worth $2.048 billion.

The company announced on July 9 that its board of directors had approved a quarterly dividend payment of 35 cents per share of Conagra common stock, which will be paid on August 28.

Outlook

Conagra Brands ( CAG ) expects adjusted EPS for fiscal 2026 to range between $1.70 and $1.85, falling short of the $2.21 analyst estimate.

The company also forecasts organic net sales growth between negative 1% and positive 1% for the year.

Conagra anticipates around 7% cost of goods sold inflation in fiscal 2026, driven by core inflation and new U.S. tariffs. The tariffs alone are expected to add 3% annually, before mitigation efforts like cost savings and pricing actions.

Price Action: CAG shares are trading lower by 8.91% to $18.57 at last check Thursday.

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