Core Insights - Conagra Brands reported a net sales decrease of 5.8% to $2.6 billion for the first quarter of fiscal year 2026, with organic net sales down 0.6% driven by a 1.2% decrease in volume despite a 0.6% positive impact from price/mix [2][10][39] - The company reaffirmed its fiscal 2026 guidance, expecting organic net sales growth between -1% to 1%, adjusted operating margin of approximately 11.0% to 11.5%, and adjusted EPS between $1.70 and $1.85 [10][27][18] Financial Performance - Gross profit decreased 13.4% to $641 million, with adjusted gross profit down 11.3% to $644 million, primarily due to lower net sales and inflationary pressures on cost of goods sold [3][10] - Selling, general, and administrative expenses (SG&A) increased 0.1% to $336 million, with adjusted SG&A rising 1.5% to $333 million, driven by higher incentive compensation [4][10] - Net income attributable to Conagra Brands fell 64.8% to $165 million, or $0.34 per diluted share, compared to $467 million, or $0.97 per diluted share in the prior year [6][10][39] Segment Performance - Grocery & Snacks segment net sales decreased 8.7% to $1.1 billion, with organic net sales impacted by a 1.6% volume decrease [7][10] - Refrigerated & Frozen segment net sales decreased 0.9% to $1.1 billion, with a volume increase of 0.5% offset by a 0.3% price/mix decrease [8][10] - International segment net sales decreased 18.0% to $212 million, driven by a 5.2% volume decrease despite a 1.7% price/mix increase [9][10] Cash Flow and Debt - The company generated $121 million in net cash flows from operating activities, down from $269 million in the prior year, primarily due to lower operating profit and increased inventory levels [17][10] - Conagra ended the quarter with net debt of $7.6 billion, a 12.3% reduction from the prior year, resulting in a net leverage ratio of 3.55x [18][10] Outlook and Guidance - The company anticipates continued elevated cost of goods sold inflation, projecting core inflation slightly above 4% and total cost of goods sold inflation in the low 7% range for fiscal 2026 [19][10] - Guidance includes an expected interest expense of approximately $390 million and an adjusted effective tax rate of around 24% for the fiscal year [18][10]