Conagra Q3 Earnings Miss Estimates, Organic Sales Decline 5.2% Y/Y

Core Insights - Conagra Brands, Inc. (CAG) reported third-quarter fiscal 2025 results with both net sales and earnings missing the Zacks Consensus Estimate, showing year-over-year declines in both metrics [1][2][3] Financial Performance - Adjusted earnings per share (EPS) were 51 cents, missing the estimate of 52 cents, and reflecting a 26.1% year-over-year decline due to reduced adjusted gross profit [3] - Net sales totaled $2,841 million, down 6.3% year over year, and also missing the consensus estimate of $2,889 million, attributed to a decrease in organic net sales, adverse currency movements, and M&A impacts [4][5] - Organic net sales decreased by 5.2% year over year, driven by a 2.1% negative impact from price/mix and a 3.1% decline in volume [5] - Adjusted gross profit fell 19.1% year over year to $704 million, with adjusted gross margin contracting by 389 basis points to 24.8% [6] Segment Performance - Grocery & Snacks segment reported net sales of $1,245.4 million, down 3.2% year over year, with organic sales declining 3.9% [8] - Refrigerated & Frozen segment saw net sales decrease by 7.2% year over year to $1,115.6 million, impacted by supply constraints [9] - International segment's net sales dropped 17.6% year over year to $223.9 million, with M&A and currency effects negatively impacting sales [10] - Foodservice segment reported a 6.1% decline in sales to $256.1 million, with organic sales falling 6.3% [11] Financial Health - At the end of the quarter, the company had cash and cash equivalents of $49.4 million, long-term debt of $6,236.8 million, and total stockholders' equity of $8,779.1 million [13] - Conagra generated $1,346.2 million in net cash flows from operating activities in the first three quarters of fiscal 2025, with capital expenditures of $304.2 million [13] Future Outlook - For fiscal 2025, Conagra expects a 2% decline in organic net sales growth, with an adjusted operating margin projected at 14.4% and adjusted earnings forecasted at $2.35 per share, down from $2.67 in fiscal 2024 [14]