09:10 AM EDT, 07/08/2025 (MT Newswires) -- Conagra Brands ( CAG ) is expected to report weak fiscal fourth-quarter results amid a challenging consumer environment, according to RBC Capital Markets.

Ongoing consumer pressure has weighed on end demand for consumer packaged goods, especially for packaged foods, the brokerage said in a client note emailed Tuesday. Tracked channel data for Conagra's grocery and snacks and refrigerated and frozen segments appear soft, with volume gains not enough to offset the company's price investments, RBC said.

The brokerage sees less downside in the packaged food company's refrigerated and frozen division due to fewer shipments in the previous quarter amid supply chain hurdles. Conagra's market share and velocities have improved on a sequential basis in frozen dinners and vegetables, which were most recently impacted by supply chain issues, according to RBC.

"However we still believe the softer environment and growth rates won't be enough and volume deleverage will have an (earnings per share) impact," RBC Co-Head of Global Consumer and Retail Research Nik Modi wrote in the note.

Conagra Brands ( CAG ) is scheduled to release its latest quarterly results later this week. The current consensus on FactSet is for the company to report non-GAAP EPS of $0.58 and sales of $2.83 billion for the quarter.

"We are still expecting a soft quarter and a challenging go-forward environment (particularly around costs/pricing) that keeps us on the sidelines," according to Modi.

RBC estimates that Conagra's fiscal 2026 will be impacted by the divestiture of its Chef Boyardee shelf-stable pasta business and the Van de Kamp's and Mrs. Paul's frozen seafood brands.

RBC anticipates the company's organic sales will be under pressure at least through the first half and believes it will issue a full-year organic sales guidance range of down 1% to up 1%. The Street is currently looking for sales of $11.49 billion for fiscal 2026.

During a conference in May, Conagra's senior management told analysts that their biggest tariff exposure was to tinplate steel, aluminum and China. "All of our US sales are manufactured at plants we have in the US, but we can't get all of our materials from the US because there's no supply," Chief Financial Officer David Marberger said during the call, according to a FactSet transcript.

The company is evaluating all measures to offset costs and is open to "targeted price increases," Marberger said at the time.

RBC has a sector perform rating on Conagra's stock with a price target of $25.