Conagra(US:CAG)2025-12-19 21:30Financial 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]