Financial Data and Key Metrics Changes - Conagra's organic net sales for Q2 were approximately $3 billion, reflecting a 3% decline compared to the prior year [18] - Adjusted gross margin was 23.4% and adjusted operating margin was 11.3%, both down from the previous year but slightly better than expectations [18] - Adjusted earnings per share were $0.45, down $0.25 year-over-year [18] Business Line Data and Key Metrics Changes - Grocery and snacks segment net sales were $1.2 billion, a 1.5% decline in organic net sales versus the prior year [22] - Refrigerated and frozen segment delivered $1.3 billion in sales, with organic net sales down 5.1% due to lower volumes [22] - Food service segment posted organic net sales growth of 0.2% over the prior year, driven by favorable pricing [22] Market Data and Key Metrics Changes - International segment organic net sales declined 2.9% versus the prior year, with growth in Mexico but softness in Canada and global markets [22] - The overall market environment remained challenging, with weak consumer sentiment and inflationary pressures impacting low and middle-income consumers [5][6] Company Strategy and Development Direction - The company is executing a tailored portfolio segmentation strategy to drive volume growth in frozen and snacks while maximizing cash in staples [3] - Project Catalyst was launched to leverage AI and new technologies to unlock value across operations, with more details expected in 2026 [4][15] - The company plans to increase advertising and promotional spending in the second half to support growth businesses [17] Management's Comments on Operating Environment and Future Outlook - Management expressed high confidence in returning to organic net sales growth in the second half, supported by robust investment and improving consumption trends [16] - The company noted that the government shutdown and weather dynamics had a significant impact on retailer ordering and inventory levels [5][6] - Management reaffirmed full-year guidance, expecting organic net sales change of -1% to +1% versus fiscal 2025 [27] Other Important Information - The company achieved record service levels in the supply chain, with approximately 99% service levels in Q2 [15] - Net debt was reduced by nearly $850 million, with net leverage at 3.83 times, favorable to expectations [25] - Adjusted equity earnings from the joint venture Ardent Mills are now expected to be approximately $170 million, down from prior expectations [26] Q&A Session Summary Question: What are the expectations for organic net sales growth in the second half? - Management expects to return to overall organic net sales growth driven by the wrap of frozen supply constraints and inflation-justified pricing actions [28] Question: How is the company addressing inflationary pressures? - The company has taken inflation-justified pricing actions and is focused on optimizing working capital to manage costs effectively [23][29] Question: What is the outlook for advertising and promotional spending? - Management indicated that A&P spending is expected to increase in the second half, peaking at over 3% in Q3 to support growth initiatives [29]

Financial Data and Key Metrics Changes - Conagra's organic net sales for Q2 were approximately $3 billion, representing a 3% decline compared to the prior year [18] - Adjusted gross margin was 23.4% and adjusted operating margin was 11.3%, both down from the previous year but slightly better than expectations [18] - Adjusted earnings per share were $0.45, down $0.25 year-over-year [18] Business Line Data and Key Metrics Changes - Grocery & Snacks segment net sales were $1.2 billion, a 1.5% decline in organic net sales versus the prior year [21] - Refrigerated & Frozen segment delivered $1.3 billion in sales, with organic net sales down 5.1% due to lower volumes and unfavorable mix [21] - Foodservice segment posted organic net sales growth of 0.2% over the prior year, driven by favorable pricing [22] Market Data and Key Metrics Changes - International segment organic net sales declined 2.9% versus the prior year, with growth in Mexico but softness in Canada and global markets [22] - The overall market environment remained challenging, with consumer sentiment weak and value-seeking behavior prevalent among low and middle-income consumers [5][4] Company Strategy and Development Direction - The company is executing a tailored portfolio segmentation strategy to drive volume growth in frozen and snacks while maximizing cash in staples [3] - Project Catalyst was launched to leverage AI and new technologies to unlock value across operations, with more details expected in calendar 2026 [4][15] - The company plans to increase advertising and promotional spending in the second half to support growth businesses [17] Management's Comments on Operating Environment and Future Outlook - Management expressed high confidence in plans to return to organic net sales growth in the second half, supported by recent inflation-justified pricing actions and robust investment [16] - The company noted that underlying consumption trends and inventory dynamics are expected to normalize, contributing to positive momentum [16] - Management acknowledged challenges from the macro environment, including a government shutdown and unseasonal weather impacting consumption [5][6] Other Important Information - The company reported a reduction in net debt by nearly $850 million, ending the quarter with net leverage at 3.83x [25] - Capital expenditures totaled $219 million, and dividends paid were $335 million for the first half [25] - Adjusted equity earnings from the joint venture Ardent Mills are now expected to be approximately $170 million, down from prior expectations [26] Q&A Session Summary Question: What are the expectations for organic net sales growth in the second half? - Management expects to return to overall organic net sales growth driven by the wrap of frozen supply constraints and robust investment plans [28] Question: How is the company managing inflationary pressures? - The company has taken inflation-justified pricing actions and is focused on optimizing working capital to manage costs effectively [23][29] Question: What is the outlook for advertising and promotional spending? - The company plans to increase advertising and promotional spending in the second half, particularly in frozen categories, to support growth [17]

Financial Data and Key Metrics Changes - Conagra's organic net sales for Q2 were approximately $3 billion, reflecting a 3% decline compared to the prior year [19] - Adjusted gross margin was 23.4% and adjusted operating margin was 11.3%, both down from the previous year but slightly better than expectations [19] - Adjusted earnings per share were $0.45, down $0.25 year-over-year [19] Business Line Data and Key Metrics Changes - Grocery and snacks segment net sales were $1.2 billion, a 1.5% decline in organic net sales versus the prior year [21] - Refrigerated and frozen segment delivered $1.3 billion in sales, with organic net sales down 5.1% [22] - Food service segment posted organic net sales growth of 0.2% over the prior year [23] Market Data and Key Metrics Changes - International segment organic net sales declined 2.9% versus the prior year, with growth in Mexico but softness in Canada and global markets [23] - The overall market environment remained challenging, with consumer sentiment weak and value-seeking behavior prevalent among low and middle-income consumers [5] Company Strategy and Development Direction - The company is executing a tailored portfolio segmentation strategy to drive volume growth in frozen and snacks while maximizing cash in staples [3] - Project Catalyst was launched, leveraging AI and new technologies to unlock value across operations [4][16] - The company is reaffirming its full-year guidance, expecting a return to organic net sales growth in the second half of the fiscal year [18][29] Management's Comments on Operating Environment and Future Outlook - Management noted that household budgets are strained, impacting consumer behavior, particularly among lower-income groups [5] - The company expressed confidence in returning to organic net sales growth based on underlying consumption trends and inventory dynamics [17] - Management highlighted the importance of upcoming merchandising events and promotional activities to drive sales in the second half [28] Other Important Information - The company achieved record service levels in its supply chain, with approximately 99% service levels in Q2 [16] - Capital expenditures totaled $219 million, and dividends paid were $335 million for the first half, both in line with the prior year [26] - Adjusted equity earnings from the joint venture Ardent Mills are now expected to be approximately $170 million, down from prior expectations [27] Q&A Session Summary Question: What are the expectations for organic net sales growth in the second half? - Management expects to return to overall organic net sales growth driven by the wrap of frozen supply constraints and recent pricing actions [28] Question: How is the company managing inflationary pressures? - The company has taken inflation-justified pricing actions and is focused on optimizing working capital to manage costs [24] Question: What is the outlook for the snacks business? - The snacks business continues to outperform, with strong demand for protein-centric products, positioning the company well for sustained growth [11]

Core Viewpoint - Conagra Brands has maintained its annual sales and profit forecasts despite challenges from pressured consumer spending and stiff competition affecting demand for its pantry staples [1] Group 1: Company Performance - Conagra Brands continues to project stable annual sales and profit forecasts, indicating confidence in its financial outlook [1] - The company faces challenges due to reduced consumer spending, which is impacting demand for its products [1] Group 2: Market Conditions - Stiff competition in the market is contributing to the pressure on demand for Conagra's pantry staples, such as Slim Jim meat snacks [1]

Financial Performance - Net sales decreased 6.8% to $3.0 billion, with organic net sales down 3.0% due to flat price/mix and a 3.0% decrease in volume[5]. - Gross profit decreased 17.8% to $696 million, and adjusted gross profit decreased 17.1% to $698 million, primarily due to lower net sales and inflation in cost of goods sold[6]. - Reported diluted loss per share was $1.39, mainly due to non-cash goodwill and brand impairment charges, while adjusted EPS was $0.45[6]. - The company reported a net loss attributable to Conagra Brands, Inc. of $663.6 million, compared to a net income of $284.5 million in the prior year[54]. - Conagra Brands reported a net loss of $499.1 million for the twenty-six weeks ended November 23, 2025, compared to a net income of $751.4 million for the same period in 2024[57]. - The company experienced a 15.7% decrease in gross profit year-to-date, reporting $1,336.6 million compared to $1,586.0 million last year[55]. - The diluted earnings per share for the second quarter was $(1.39), compared to $0.59 in the same quarter last year[54]. - Adjusted net income for Q2 FY26 was $218.0 million, with diluted EPS of $0.45, down from $0.70 in Q2 FY25, reflecting a year-over-year decline of 35.7%[61]. - Adjusted YTD net income for Q2 FY26 was $407.2 million, with diluted EPS of $0.85, a decrease of 30.9% from $1.23 in Q2 FY25[62]. Segment Performance - The Grocery & Snacks segment net sales decreased 8.5% to $1.2 billion, driven by a volume decrease of 2.3%[11]. - The Refrigerated & Frozen segment reported an operating loss of $832 million due to goodwill and brand impairment charges, with adjusted operating profit down 35.6% to $128 million[14]. - The International segment net sales decreased 5.4% to $230 million, with a volume decrease of 6.4%[15]. - Organic net sales for Q2 FY26 decreased by 6.8% year-over-year, totaling $2,975.1 million, with significant declines in Grocery & Snacks and Refrigerated & Frozen segments[58]. - The Grocery & Snacks segment reported an adjusted operating profit of $231.2 million, reflecting a year-over-year decline of 21.8%[59]. - The Refrigerated & Frozen segment experienced an adjusted operating profit of $127.5 million, a decrease of 35.6% year-over-year[59]. - The International segment achieved an adjusted operating profit of $69.8 million, with a year-over-year decrease of 7.1%[60]. Cash Flow and Debt - The company generated $331 million in net cash flows from operating activities, down from $754 million in the prior year period[24]. - Net debt at the end of the quarter was $7.6 billion, a 10.1% reduction year-over-year, resulting in a net leverage ratio of 3.83x[25]. - The company experienced a cash flow from operating activities of $331.2 million for the twenty-six weeks ended November 23, 2025, down from $754.2 million in the prior year[57]. - Total debt decreased to $7,623.9 million in Q2 FY26 from $8,463.6 million in Q2 FY25, while net debt also reduced to $7,577.3 million from $8,426.2 million[63]. - The net debt to adjusted EBITDA ratio stood at 3.83 as of November 23, 2025[64]. Guidance and Future Outlook - The company reaffirmed its fiscal 2026 guidance, expecting organic net sales change of (1)% to 1% and adjusted EPS between $1.70 and $1.85[28]. - The company expects total cost of goods sold inflation of approximately 7% for fiscal 2026, driven by core inflation and tariffs[30]. - The company plans to focus on market expansion and new product development to drive future growth despite current challenges[58]. Impairment and Restructuring - Goodwill impairment charges amounted to $771.3 million, representing a 100% increase from the previous year when there were no such charges[54]. - Conagra Brands incurred goodwill and brand impairment charges totaling $968.3 million in Q2 FY26[59]. - The company reported an asset impairment charge of $975.0 million for the twenty-six weeks ended November 23, 2025, significantly higher than $87.6 million in the same period last year[57]. - Restructuring plans contributed $2.9 million to adjusted operating profit YTD, with a significant impact from legal matter recoveries of -$37.4 million[60]. - The company reported a restructuring plan expense of $2.5 million in Q2 FY26 YTD, down from $82.1 million in Q2 FY25 YTD[65]. Other Financial Metrics - Interest expense for the second quarter was $96.0 million, down 11.2% from $108.2 million in the previous year[54]. - Equity method investment earnings decreased by 33.5%, from $48.5 million to $32.2 million year-over-year[54]. - Year-to-date (YTD) reported gross profit for Q2 FY26 was $1,336.6 million, or 23.8% of net sales, down 266 basis points compared to the previous year[62]. - Year-over-year adjusted gross margin for Q2 FY26 was 24.2%, reflecting a decrease of 227 basis points compared to Q2 FY25[62]. - Free cash flow dropped significantly by 79.1% to $112.6 million in Q2 FY26 YTD from $538.8 million in Q2 FY25 YTD[63]. - Corporate hedging derivative gains for Q2 FY26 were $3.6 million, positively impacting adjusted net income[62]. - Advertising and promotion (A&P) expenses were $74.3 million for Q2 FY26, accounting for 2.5% of net sales, compared to 2.2% in Q2 FY25[61].

Conagra Brands, Inc. (NYSE:CAG) will release earnings results for its second quarter before the opening bell on Friday, Dec. 19.Analysts expect the Chicago, Illinois-based company to report quarterly earnings at 44 cents per share, down from 70 cents per share in the year-ago period. The consensus estimate for Conagra Brands' quarterly revenue is $2.98 billion. Last year, it reported $3.2 billion in revenue, according to Benzinga Pro.On Oct. 1, Conagra Brands posted first-quarter fiscal 2026 results that to ...

Core Insights - Conagra Brands, Inc. is set to release its second-quarter earnings results on December 19, with analysts expecting earnings of 44 cents per share, a decline from 70 cents per share in the same quarter last year [1] - The consensus estimate for quarterly revenue is $2.98 billion, down from $3.2 billion reported in the previous year [1][2] Earnings Performance - In the first quarter of fiscal 2026, Conagra Brands exceeded Wall Street expectations but still reported year-over-year declines [2] - The company's shares fell by 0.7%, closing at $17.80 [2] Analyst Ratings and Price Targets - Wells Fargo analyst Chris Carey maintained an Equal-Weight rating and reduced the price target from $20 to $19 [3] - Stifel analyst Matthew Smith also maintained a Hold rating, cutting the price target from $21 to $19 [3] - Goldman Sachs analyst Leah Jordan maintained a Sell rating, lowering the price target from $18 to $16 [3] - Evercore ISI Group analyst David Palmer kept an In-Line rating, reducing the price target from $24 to $23 [3] - Morgan Stanley analyst Megan Alexander maintained an Equal-Weight rating and raised the price target from $20 to $21 [3]

Core Insights - Conagra Brands (CAG) is a well-known company with a strong presence in kitchens, offering products such as frozen meals, snacks, and pantry staples [1] Company Overview - Conagra Brands specializes in frozen meals, snacks, and pantry staples, making it a staple in many households [1] Analyst Background - The analysis is conducted by an independent investment analyst with over four years of experience in global equities, focusing on deep fundamental research and long-term investment theses [1] - The analyst's expertise includes equity research, data analysis, and financial modeling, with a focus on identifying undervalued businesses and high-quality compounders [1] Investment Approach - The investment approach combines bottom-up fundamental analysis with top-down macro context, emphasizing financial statement study, competitive landscape mapping, and qualitative assessment of management quality [1]

Core Insights - Conagra Brands (CAG) is a well-known company with a strong presence in kitchens, offering products such as frozen meals, snacks, and pantry staples [1] Company Overview - Conagra Brands specializes in frozen meals, snacks, and pantry staples, making it a staple in many households [1] Investment Analysis - The article emphasizes the importance of fundamental research and long-term investment theses in evaluating companies like Conagra Brands [1]

Company Overview - Conagra Brands, Inc. (CAG) is valued at a market cap of $8.5 billion and operates in the packaged food sector, manufacturing and distributing a variety of food products including frozen meals, snacks, and grocery staples [1] Earnings Expectations - The company is set to announce its fiscal Q2 earnings for 2026 on December 19, with analysts predicting a profit of $0.44 per share, which represents a 37.1% decrease from $0.70 per share in the same quarter last year [2] - For the current fiscal year ending in May 2026, analysts expect CAG to report a profit of $1.75 per share, down 23.9% from $2.30 per share in fiscal 2025, but anticipate a rebound to $1.86 per share in fiscal 2027, reflecting a year-over-year growth of 6.3% [3] Stock Performance - CAG's stock has declined by 35.7% over the past 52 weeks, underperforming the S&P 500 Index, which returned 11.1%, and the State Street Consumer Staples Select Sector SPDR ETF, which saw a 2.2% decrease [4] - On October 1, shares of CAG rose by 5.4% following better-than-expected Q1 results, despite an overall revenue decline of 5.8% year-over-year to $2.6 billion [5] Analyst Ratings - Wall Street analysts maintain a cautious stance on CAG's stock, with an overall "Hold" rating. Among 16 analysts, two recommend "Strong Buy," 12 suggest "Hold," one indicates "Moderate Sell," and one advises "Strong Sell" [6] - The mean price target for CAG is $20.07, indicating a potential upside of 12% from current levels [6]