Conagra(US:CAG)2026-04-01 20:30Financial Performance - Net sales for the thirteen weeks ended February 22, 2026, were $2,787.8 million, a decrease of 1.9% compared to $2,841.0 million for the same period in 2025[8]. - Gross profit for the thirty-nine weeks ended February 22, 2026, was $1,994.3 million, down 13.2% from $2,296.3 million in the prior year[8]. - Operating profit for the thirteen weeks ended February 22, 2026, increased to $280.1 million, up 17.0% from $239.4 million in the same period last year[8]. - Net income attributable to Conagra Brands, Inc. for the thirteen weeks ended February 22, 2026, was $199.8 million, compared to $145.1 million for the same period in 2025, representing a 37.7% increase[8]. - Earnings per share (diluted) for the thirteen weeks ended February 22, 2026, was $0.42, an increase from $0.30 in the prior year[8]. - Net income for the thirty-nine weeks ended February 22, 2026, was a loss of $299.3 million, compared to a net income of $896.5 million for the same period in the previous year[16]. - The company reported a loss before income taxes of $136.6 million for the thirty-nine weeks ended February 22, 2026, primarily due to goodwill impairment charges of $771.3 million[119]. - Diluted earnings per share increased to $0.42 in Q3 fiscal 2026 from $0.30 in Q3 fiscal 2025, reflecting higher net income[132]. Assets and Liabilities - Total current assets decreased to $2,890.8 million as of February 22, 2026, from $3,071.0 million as of May 25, 2025[13]. - Total liabilities decreased to $11,048.2 million as of February 22, 2026, from $12,001.2 million as of May 25, 2025[13]. - Cash and cash equivalents were $55.1 million as of February 22, 2026, down from $68.0 million as of May 25, 2025[13]. - The carrying amount of goodwill decreased to $9,730.7 million as of February 22, 2026, primarily due to an impairment of $771.3 million in the Refrigerated & Frozen segment[52]. - Total liabilities as of February 22, 2026, were $82.2 million, with derivative liabilities at $4.4 million and deferred compensation liabilities at $77.8 million[106]. - The carrying amount of long-term debt was $7.23 billion as of February 22, 2026, with a fair value estimated at $7.16 billion[112][113]. Cash Flow - Cash flows from operating activities totaled $895.6 million, a decrease from $1,346.2 million in the prior year[16]. - The company reported a net cash flow from investing activities of $371.1 million, compared to a net outflow of $457.2 million in the previous year[16]. - Cash generated from operating activities totaled $895.6 million in the first three quarters of fiscal 2026, down from $1.35 billion in 2025, primarily due to lower operating profits[181]. - Cash generated from investing activities was $371.1 million in the first three quarters of fiscal 2026, compared to cash used of $457.2 million in the same period of fiscal 2025[182]. Impairment Charges - The company reported a goodwill impairment charge of $771.3 million for the thirty-nine weeks ended February 22, 2026[8]. - The company recognized non-cash goodwill impairment charges of $771.3 million in the Refrigerated & Frozen reporting unit, primarily due to a 150-basis point increase in the discount rate and lower projected sales and profit margins[56]. - Impairment charges of $180.0 million were recognized for the Birds Eye® brand name and $17.0 million for spreads businesses, driven by increased discount rates and lower than expected profit margins[57]. Restructuring and Costs - Conagra has approved a restructuring plan with expected costs of $357.6 million, including $113.4 million in cash charges and $244.2 million in non-cash charges, to improve SG&A expense effectiveness and optimize the supply chain by the end of fiscal 2026[37]. - In the first three quarters of fiscal 2026, Conagra recognized $10.7 million in charges related to the restructuring plan, compared to $90.7 million in the same period of fiscal 2025[37]. - The company anticipates approximately $34 million in restructuring charges related to supply chain optimization initiatives for frozen fried chicken products, with $12 million expected to be cash charges[40]. Stockholders' Equity - Stockholders' equity at February 22, 2026, totaled $8,164.1 million, a decrease from $8,915.8 million at August 24, 2025[98]. - The balance of retained earnings decreased to $5,955.6 million as of February 22, 2026, from $6,755.9 million at August 24, 2025[98]. - Dividends declared on common stock were $0.35 per share, totaling $167.7 million for the period ending February 22, 2026[98]. Segment Performance - Net sales for the thirteen weeks ended February 22, 2026, totaled $2,787.8 million, with Grocery & Snacks contributing $1,167.1 million and Refrigerated & Frozen contributing $1,133.2 million[118]. - Segment operating profit for the same period was $379.2 million, with Grocery & Snacks at $216.7 million and Refrigerated & Frozen at $104.8 million[118]. - Segment SG&A expenses for the thirteen weeks ended February 22, 2026, totaled $280.3 million, with the highest expenses in Grocery & Snacks at $113.0 million[118]. - The Grocery & Snacks segment saw a 6.3% decline in net sales to $1.17 billion, while the Refrigerated & Frozen segment increased by 1.6% to $1.13 billion[146]. Tax and Litigation - The effective tax rate for the third quarter of fiscal 2026 was 13.0%, down from 23.3% in the same quarter of fiscal 2025[76]. - The Company has settled litigation matters for a total of $141.1 million in fiscal 2026 and $25 million in fiscal 2025, with an additional $44.3 million expected to be paid in fiscal 2026 and Q1 fiscal 2027[82]. - As of February 22, 2026, the accrual for all litigation matters was $47.8 million[87]. Future Outlook - The company anticipates ongoing challenges related to supply chain disruptions and inflation impacting future performance[127]. - Conagra Brands anticipates continued volatility in costs of goods sold due to inflation and trade policy changes in fiscal 2026[134].