Financial Performance - Net sales for the thirteen weeks ended November 23, 2025, were $2,979.1 million, a decrease of 6.8% compared to $3,195.1 million for the same period in 2024[8] - Gross profit for the twenty-six weeks ended November 23, 2025, was $1,336.6 million, down 15.7% from $1,586.0 million in 2024[8] - The company reported a net loss of $663.6 million for the thirteen weeks ended November 23, 2025, compared to a net income of $284.5 million in the same period last year[8] - Net income for the twenty-six weeks ended November 23, 2025, was a loss of $499.1 million, compared to a net income of $751.4 million for the same period in 2024[16] - The company reported a comprehensive loss of $670.8 million for the thirteen weeks ended November 23, 2025, compared to a comprehensive income of $263.3 million in the same period last year[11] - Operating profit for the first half of fiscal 2026 was a loss of $250.2 million, down from a profit of $804.2 million in the same period of fiscal 2025[8] Asset and Liability Management - Total current assets increased to $3,226.3 million as of November 23, 2025, compared to $3,071.0 million as of May 25, 2025[13] - Total liabilities decreased to $11,449.5 million as of November 23, 2025, from $12,001.2 million as of May 25, 2025[13] - Current liabilities decreased to $3,619.7 million from $4,317.0 million, indicating improved liquidity[13] - Cash and cash equivalents decreased to $46.6 million as of November 23, 2025, from $68.0 million as of May 25, 2025[13] - The company’s retained earnings decreased to $5,924.3 million as of November 23, 2025, from $6,759.1 million as of May 25, 2025[13] Impairment Charges - Goodwill impairment charges amounted to $771.3 million for the thirteen weeks ended November 23, 2025, with no charges reported in the same period of 2024[8] - The company recognized asset impairment charges of $975.0 million, significantly higher than $87.6 million in the previous year[16] - The carrying amount of goodwill decreased to $9.73 billion as of November 23, 2025, primarily due to a $771.3 million impairment in the Refrigerated & Frozen reporting unit[54][58] - The company recognized additional impairment charges of $180.0 million related to the Birds Eye® brand name and $17.0 million for the Earth Balance® and Smart Balance® brands[60] Cash Flow and Financing Activities - Cash flows from operating activities decreased to $331.2 million from $754.2 million year-over-year[16] - Cash flows from investing activities improved to $467.2 million, compared to a net outflow of $366.0 million in the prior year[16] - The company repaid $1.00 billion of 4.60% senior unsecured notes on November 1, 2025, funded by $500.0 million of new 5.00% senior unsecured notes due August 1, 2030, and $500.0 million of 5.75% senior unsecured notes due August 1, 2035[41] - The company prepaid $200.0 million and $300.0 million of unsecured term loans in fiscal 2026, utilizing proceeds from the sale of the Chef Boyardee® business[43][44] Segment Performance - The Grocery & Snacks segment reported net sales of $1,209.1 million, down from $1,321.0 million in the prior year, a decrease of about 8.5%[112][113] - The Refrigerated & Frozen segment's net sales were $1,251.2 million, compared to $1,338.5 million in the previous year, reflecting a decline of approximately 6.5%[112][113] - The Foodservice segment generated net sales of $288.4 million, slightly down from $292.2 million in the prior year, a decrease of approximately 1.3%[112][113] Shareholder Returns and Equity - The balance of stockholders' equity as of November 23, 2025, was $8,090.8 million, down from $8,932.7 million as of May 25, 2025[95] - The company declared dividends of $0.35 per share, totaling $167.8 million for the period ending August 25, 2024, and $167.0 million for the period ending November 24, 2024[96] - The company repurchased 0.8 million shares of common stock for $15.0 million during the first quarter of fiscal 2026, with a remaining share repurchase authorization of $837.6 million as of November 23, 2025[169] Restructuring and Strategic Initiatives - The company incurred cumulative charges of $324.1 million related to the Conagra Restructuring Plan, with ongoing costs expected through the end of fiscal 2026[38] - In the first half of fiscal 2026, total pre-tax expenses for the Conagra Restructuring Plan amounted to $2.9 million, with $10.8 million resulting in cash outflows and a $7.9 million non-cash net benefit[39] - The company is analyzing the impact of recently issued accounting standards on its financial disclosures, with early adoption options available for some[18][19][20][21][22] Tax and Legal Matters - The effective tax rate for Q2 fiscal 2026 was (1.3)%, significantly lower than 17.8% in Q2 fiscal 2025, impacted by a goodwill impairment charge[76] - The company recognized an income tax expense of $132.9 million in the first half of fiscal 2026, compared to an income tax benefit of $77.4 million in the first half of fiscal 2025[76] - The total accrual for all litigation matters was $92.3 million as of November 23, 2025, and $204.5 million as of May 25, 2025[85] Acquisitions and Divestitures - The company completed the sale of its Chef Boyardee business for net proceeds of $607.0 million, recognizing a gain of $42.7 million on the sale[29] - Conagra Brands acquired the manufacturing operations of a contract manufacturer for cooking spray products for a cash purchase price of $51.2 million, with approximately $46.3 million classified as goodwill[23] - The divestiture of a 51.8% stake in Agro Tech Foods Limited generated net proceeds of $76.8 million, with a recognized loss of $2.3 million[33]

Core Insights - Conagra Brands, Inc. reported an earnings per share (EPS) of $0.45, exceeding the estimated $0.43, but reflecting a decline from $0.70 in the same quarter last year [2][6] - The company's revenue for the quarter was approximately $2.98 billion, slightly below the estimated $2.97 billion, marking a 6.8% decline from $3.2 billion in the previous year [3][6] - Despite the revenue shortfall, the CEO expressed confidence in the company's strategic direction, emphasizing innovation and increased investments to drive future growth [4][6] Financial Metrics - Conagra has a price-to-earnings (P/E) ratio of approximately 9.69, indicating market valuation of its earnings [5] - The price-to-sales ratio is about 0.72, suggesting the stock is valued at less than its annual sales [5] - The debt-to-equity ratio stands at approximately 0.93, reflecting the company's leverage level relative to its equity [5]

Core Insights - Conagra Brands, Inc. (CAG) reported a decline in both earnings and sales for the second quarter of fiscal 2026, reflecting a challenging consumer environment and lower volumes, partially offset by productivity gains and strong performance in certain growth categories [1] Financial Performance - Adjusted earnings per share (EPS) for the quarter were 45 cents, exceeding the Zacks Consensus Estimate of 44 cents, but down 35.7% year over year due to lower adjusted operating profit [2] - Net sales decreased by 6.8% year over year to $2,979.1 million, missing the Zacks Consensus Estimate of $2,990 million, with a 3.9% headwind from M&A and a 3% decline in organic net sales [3][11] - Organic net sales fell 3% due to a 3% decline in volume, while price/mix remained flat, with management noting a 100-basis-point headwind from retailer purchasing patterns [4][11] - Adjusted gross profit declined 17.1% to $698 million, with adjusted gross margin contracting 292 basis points to 23.4% [5] Segment Performance - Grocery & Snacks segment net sales fell 8.5% year over year to $1,209 million, impacted by a 7.0% adverse M&A effect and a 1.5% decline in organic net sales [6] - Refrigerated & Frozen segment net sales decreased by 6.5% to $1,251 million, with a 5.1% drop in organic net sales [7] - International segment sales declined 5.4% to $230 million, reflecting a 4.1% M&A impact and a 2.9% fall in organic net sales [8] - Foodservice sales decreased 1.3% to $288 million, with organic performance reflecting a 4.2% benefit from price/mix, offset by a 4.0% volume decline [9] Financial Health - In the first half of fiscal 2026, Conagra generated net cash from operating activities of $331 million, with capital expenditures totaling $219 million, resulting in free cash flow of $113 million [12] - The company ended the second quarter with net debt of $7.6 billion and paid a dividend of 35 cents per share [12] Future Outlook - Conagra reiterated its fiscal 2026 outlook, projecting organic net sales to range from a decline of 1% to growth of 1% compared to fiscal 2025, with adjusted EPS anticipated between $1.70 and $1.85 [13] - The outlook factors in continued elevated inflation in the cost of goods sold, with core inflation expected to be slightly above 4% [14] - Total cost of goods sold inflation is projected at approximately 7%, with measures expected to raise costs by roughly 3% annually before mitigation efforts [15]

Market Overview - Major indexes closed higher on Thursday, influenced by a -40 basis-point decline in the Inflation Rate from the CPI report, marking the first decline since early this year [1] - Pre-market futures are fluctuating, with the Dow down 7 points, S&P 500 up 6 points, Nasdaq up 56 points, and Russell 2000 up 6 points [2] - The day is characterized as Quadruple Witching, which may lead to increased volatility due to the expiration of futures and options [2] Santa Claus Rally Potential - Despite recent gains, indexes are down over the past week, with concerns about AI infrastructure spending affecting tech stocks [3] - The "Santa Claus Rally" typically occurs in the last trading days of the year, often correcting earlier trading discrepancies and looking forward to new year opportunities [4] - Current market conditions suggest a favorable environment for a potential Santa Claus Rally [4] Earnings Reports - Nike (NKE) and FedEx (FDX) reported better-than-expected earnings but saw stock declines due to external challenges, including weakness in China and tariff impacts [5] - Winnebago (WGO) surprised with a +216% positive earnings surprise, reporting $0.38 per share and $702.7 million in revenues, leading to a 16% increase in shares [6] - Lamb Weston (LW) beat earnings estimates but faced a 15% drop in shares due to flat sales in North America and uncertainties from international acquisitions [8] - Conagra (CAG) reported earnings slightly above estimates but is down marginally after a significant year-to-date decline of 35% [8]

Financial Data and Key Metrics Changes - The company expects organic net sales growth in the second half of the fiscal year, with positive momentum observed in December [11][12] - Operating profit and margin performance in the first half of the year has been good, with favorable tariff timing and chicken inflation, although there are offsets with beef and pork [21][22] - The company maintains its inflation guidance of 7% for the year, with core inflation above 4% and gross tariff inflation around 3% [42][44] Business Line Data and Key Metrics Changes - The frozen and snacks segments are identified as growth domains, with snacks already showing robust growth and frozen aiming to reclaim market share lost due to previous supply constraints [31][32] - The company is focusing on high-quality promotional activities in the frozen segment, which were limited last year due to supply issues [32][33] Market Data and Key Metrics Changes - The company has seen a return to growth in the frozen and snacks categories, with strong marketing plans in place for the second half of the year [31][33] - The market share in frozen single-serve meals is approaching 53%, indicating a recovery in that segment [32] Company Strategy and Development Direction - The company is implementing Project Catalyst, which focuses on re-engineering core business processes using technology, particularly AI, to improve efficiency and effectiveness [25][26] - The company is committed to margin expansion, particularly in the frozen segment, through productivity improvements and supply chain resiliency investments [52][53] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the volatility in the operating environment and has guided a wider range for EPS to navigate uncertainties [23][83] - The company is optimistic about the second half of the fiscal year, expecting strong underlying trends and promotional activities to drive growth [85] Other Important Information - The company has completed the baked chicken facility, which is expected to enhance production efficiency and margins [100][101] - An impairment charge was taken due to a sustained decline in stock price, which required a reassessment of goodwill and brand values [102][104] Q&A Session Summary Question: Expectations for organic sales growth in fiscal Q3 - Management expects positive organic net sales growth in the second half, with momentum building in December [11][12] Question: Clarification on annual outlook and EPS impact from Ardent - Management believes they can offset the shortfall from Ardent and maintain EPS guidance despite a wider range due to market volatility [22][23] Question: Insights on Project Catalyst and cost savings - Project Catalyst aims to automate core business processes, with expected costs and returns being evaluated as the project progresses [25][26] Question: Consumption trends and growth outlook for fiscal 2027 - Management sees potential for growth in frozen and snacks, with strong marketing plans and market share recovery [31][33] Question: Impact of competitors' price cuts on the company - The company has not rolled back prices to move volume but has maintained pricing to support promotional activities [40][41] Question: Inflation guidance and its implications - The company maintains its inflation guidance of 7% for the year, with expectations for inflation to normalize in the future [42][44] Question: Repatriation of production and margin improvement - The transition to in-house production is underway, with expectations incorporated into the fiscal guidance [100][101] Question: Details on impairment charge - The impairment charge was due to a decline in stock price, necessitating a reassessment of goodwill and brand values [102][104]

Financial Data and Key Metrics Changes - The company expects organic net sales growth in the second half of the fiscal year, with positive momentum observed in December [11][12] - Operating profit and margin performance in the first half of the year has been good, with favorable tariff timing and chicken inflation, although there are offsets with beef and pork [21][22] - The company maintains a total gross inflation guidance of 7% for the year, with core inflation slightly above 4% and gross tariff inflation around 3% [42][44] Business Line Data and Key Metrics Changes - The frozen and snacks segments are identified as growth domains, with snacks already showing robust growth and frozen aiming to reclaim market share lost due to previous supply constraints [31][32] - The company is focusing on productivity improvements, with productivity running at about 5% [52] Market Data and Key Metrics Changes - The company has seen a return to growth in the snacks category, benefiting from a bounce back in convenience stores [31] - Frozen single-serve meals market share is close to 53%, indicating strong recovery and growth potential [32] Company Strategy and Development Direction - The company is implementing Project Catalyst, which focuses on re-engineering core business processes using technology, particularly AI, to enhance efficiency and effectiveness [25][26] - The company is committed to margin expansion, particularly in the frozen segment, through productivity improvements and supply chain resiliency investments [52] Management's Comments on Operating Environment and Future Outlook - Management acknowledges the volatility in the operating environment and has guided to a wider range for EPS to navigate uncertainties [23][82] - The company is optimistic about the second half of the fiscal year, expecting strong promotional activity and improved market conditions [85] Other Important Information - The company has completed the baked chicken facility, which is expected to enhance production efficiency and margin [100] - An impairment charge was taken due to a sustained decline in stock price, which required a reassessment of goodwill and brand value [102][103] Q&A Session Summary Question: Expectations for organic sales growth in Q3 - Management expects positive organic net sales growth in the second half, with momentum building in December [11][12] Question: Clarification on annual outlook and impact of Ardent - Management feels confident in offsetting the shortfall from Ardent and maintaining EPS guidance [22][23] Question: Insights on Project Catalyst and cost savings - Project Catalyst aims to automate business processes for improved efficiency, with expected returns on investment [25][26] Question: Consumption trends and growth outlook for fiscal 2027 - Management sees potential for growth in frozen and snacks, with strong marketing plans in place [31][34] Question: Impact of competitors' price cuts - The company has not rolled back prices to move volume but has maintained pricing to support promotional activities [40][41] Question: Inflation guidance and its components - The company maintains a total gross inflation guidance of 7%, with some favorable trends in chicken but increased costs in beef and pork [42][44] Question: AMP spending and consumer value-seeking behavior - The company will emphasize relative value in advertising to attract consumers [74][75] Question: Weather impact on sales - Management noted that colder weather has positively affected sales trends in the canned food segment [79][80] Question: EPS range and uncertainties - Management indicated that the EPS range remains wide due to ongoing uncertainties in the market [82][83] Question: Portfolio management and M&A strategy - The company is open to reshaping its portfolio for value creation but is currently focused on debt reduction [95] Question: Completion of the baked chicken facility and margin improvement - The transition to in-house production is expected to enhance margins, with the project on track [100][101]

Core Insights - Conagra Brands reported revenue of $2.98 billion for the quarter ended November 2025, reflecting a decline of 6.8% year-over-year and a slight miss of 0.35% against the Zacks Consensus Estimate of $2.99 billion [1] - The earnings per share (EPS) for the quarter was $0.45, down from $0.70 in the same quarter last year, with a positive surprise of 2.27% compared to the consensus estimate of $0.44 [1] Financial Performance Metrics - Net Sales growth in Grocery & Snacks was -8.5%, outperforming the average estimate of -11% from four analysts [4] - Net Sales growth in Refrigerated & Frozen was -6.5%, compared to the average estimate of -4.1% [4] - Price/Mix in Foodservice increased by 4.2%, exceeding the average estimate of 2.4% [4] - Organic Volume in Foodservice decreased by 4%, worse than the average estimate of -3.1% [4] - Price/Mix in International was up 3.5%, surpassing the average estimate of 2% [4] - Organic Volume in International declined by 6.4%, compared to the average estimate of -1.9% [4] - Net Sales growth in International was -5.4%, worse than the average estimate of -2.2% [4] - Net Sales growth in Foodservice was -1.3%, compared to the average estimate of -0.8% [4] Sales Breakdown - Sales in Grocery & Snacks amounted to $1.21 billion, slightly above the average estimate of $1.18 billion, representing a year-over-year decline of 8.5% [4] - Sales in Foodservice were reported at $288.4 million, close to the average estimate of $289.97 million, reflecting a -1.3% change year-over-year [4] - Sales in International reached $230.4 million, below the average estimate of $238.31 million, indicating a year-over-year change of -5.3% [4] - Sales in Refrigerated & Frozen totaled $1.25 billion, compared to the average estimate of $1.28 billion, marking a -6.5% change year-over-year [4] Stock Performance - Shares of Conagra Brands have returned +2.4% over the past month, slightly underperforming the Zacks S&P 500 composite's +2.5% change [3] - The stock currently holds a Zacks Rank 3 (Hold), suggesting it may perform in line with the broader market in the near term [3]

Financial Data and Key Metrics Changes - The company expects organic net sales growth in the second half of fiscal 2026, driven by improved shipment flows and easier comparisons in the frozen segment [9][10] - Operating profit and margin performance in the first half of the year were strong, with favorable tariff timing and productivity programs contributing positively [18][21] - The company maintains a total gross inflation guidance of 7% for the year, with core inflation slightly above 4% and tariff inflation around 3% [41][42] Business Line Data and Key Metrics Changes - The frozen and snacks segments are identified as key growth areas, with snacks already showing robust growth and frozen aiming to reclaim market share lost during supply constraints [28][30] - The company is focusing on high-quality promotional activities in the frozen segment, which were limited in the previous year due to supply issues [30][31] Market Data and Key Metrics Changes - The company has seen a return to growth in the snacks segment, benefiting from increased convenience store traffic [28] - The frozen segment's market share is recovering, with single-serve meals approaching a 53% market share, indicating strong competitive positioning [30] Company Strategy and Development Direction - The company is implementing Project Catalyst, aimed at re-engineering core business processes using technology and AI to enhance efficiency and effectiveness [23][24] - The focus remains on debt reduction and evaluating portfolio opportunities, including potential divestitures and inbounds, to create shareholder value [92] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving positive organic sales growth in the second half of the fiscal year, despite a volatile environment [21][22] - The company is cautious about predicting inflation trends but anticipates a normalization in protein prices, which have been a significant cost driver [88][89] Other Important Information - The company completed a significant impairment charge due to a sustained decline in stock price, necessitating a reassessment of goodwill and brand values [100][101] - The baked chicken facility is now complete, with plans to repatriate production to improve margins [96][99] Q&A Session Summary Question: Expectations for organic sales growth in Q3 - Management expects positive organic net sales growth in the second half, with improved shipment flows and promotional activities [9][10] Question: Impact of competitors' price cuts - The company has not rolled back prices to move volume but has maintained pricing to support promotional activities [37][38] Question: Inflation guidance and its components - The company maintains a gross inflation guidance of 7%, with core inflation slightly above 4% and tariff inflation around 3% [41][42] Question: AMP spending and its impact - Increased AMP spending will emphasize relative value in marketing, aiming to attract value-seeking consumers [72][73] Question: Trends in frozen and refrigerated segments - Management anticipates a strong second half for frozen products, with market shares recovering and promotional activities ramping up [83][84] Question: Portfolio management and potential M&A - The company is open to reshaping its portfolio for value creation but is currently focused on debt reduction [92] Question: Completion of the baked chicken facility - The facility is complete, and production will transition back in-house, which is expected to improve margins [96][99]

Market Overview - U.S. stocks traded higher, with the Dow Jones index gaining over 200 points, up 0.49% to 48,188.36, NASDAQ rising 1.03% to 23,243.38, and S&P 500 increasing 0.73% to 6,824.15 [1] - Information technology shares rose by 1.6%, while real estate stocks fell by 0.1% [1] Company Performance - Conagra Brands Inc (NYSE:CAG) shares fell more than 4% after reporting second-quarter earnings of 45 cents per share, beating the analyst consensus estimate of 44 cents, but quarterly sales of $2.979 billion missed the estimate of $2.986 billion [2] Commodity Market - Oil traded up 1% to $56.47, while gold decreased by 0.2% to $4,365.60. Silver fell 1.9% to $65.640, and copper rose 0.1% to $5.4360 [4] Global Market Performance - European shares were higher, with the eurozone's STOXX 600 gaining 0.1%, Spain's IBEX 35 up 0.2%, London's FTSE 100 up 0.2%, Germany's DAX 40 rising 0.2%, and France's CAC 40 gaining 0.1% [5] - Asian markets closed higher, with Japan's Nikkei 225 gaining 1.03%, Hong Kong's Hang Seng up 0.75%, China's Shanghai Composite rising 0.36%, and India's BSE Sensex increasing 0.53% [6] Notable Stock Movements - Autozi Internet Technology (NASDAQ:AZI) shares surged 85% to $2.81 after a $90 million initial equity investment was confirmed by a strategic investor [8] - Julong Holding Ltd (NASDAQ:JLHL) shares increased by 43% to $4.37, while ProPhase Labs Inc (NASDAQ:PRPH) shares rose 44% to $0.15 following a non-binding LOI for a proposed reverse merger [8] - Geovax Labs Inc (NASDAQ:GOVX) shares dropped 47% to $0.13, and Nisun International Enterprise Development Group Co Ltd (NASDAQ:NISN) fell 44% to $1.86 [8]

Core Insights - Conagra Brands (CAG) reported quarterly earnings of $0.45 per share, exceeding the Zacks Consensus Estimate of $0.44 per share, but down from $0.7 per share a year ago, indicating an earnings surprise of +2.27% [1] - The company posted revenues of $2.98 billion for the quarter ended November 2025, missing the Zacks Consensus Estimate by 0.35% and down from $3.2 billion year-over-year [2] - Conagra Brands shares have declined approximately 35.9% year-to-date, contrasting with the S&P 500's gain of 15.2% [3] Earnings Outlook - The future performance of Conagra Brands' stock will largely depend on management's commentary during the earnings call and the company's earnings outlook [4] - The current consensus EPS estimate for the upcoming quarter is $0.41 on revenues of $2.74 billion, and for the current fiscal year, it is $1.75 on revenues of $11.25 billion [7] Industry Context - The Food - Miscellaneous industry, to which Conagra Brands belongs, is currently ranked in the bottom 20% of over 250 Zacks industries, which may negatively impact stock performance [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, suggesting that investors should monitor these revisions closely [5][6]