Conagra Brands ( (CAG) ) has released its Q3 earnings. Here is a breakdown of the information Conagra Brands presented to its investors.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
- Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week.
Conagra Brands, Inc., a leading North American branded food company, is known for its diverse portfolio of popular food brands, including Birds Eye, Duncan Hines, and Slim Jim, among others. In its recent third-quarter earnings report for fiscal year 2025, Conagra Brands announced a decrease in net sales by 6.3% compared to the previous year, with organic net sales down by 5.2%. The company reported a significant drop in diluted earnings per share by 53.1% to $0.30, although its fiscal 2025 guidance remains unchanged.
Key financial metrics highlighted a challenging quarter for Conagra, with a reported operating margin of 8.4%, down 712 basis points, and adjusted operating margin at 12.7%, a decrease of 369 basis points. The company’s gross profit fell by 17.3% to $710 million, impacted by lower net sales and cost of goods sold inflation. Despite these setbacks, Conagra Brands maintained strong consumption trends and share performance, showing resilience in its brand portfolio.
Segment-wise, the Grocery & Snacks segment saw a 3.2% decline in net sales, while the Refrigerated & Frozen segment experienced a 7.2% drop, primarily due to supply constraints. The International segment faced a 17.6% decrease in net sales, largely affected by unfavorable foreign exchange and M&A impacts. The Foodservice segment also reported a decline, with net sales down by 6.1% due to ongoing softness in commercial traffic.
Looking ahead, Conagra Brands remains focused on execution and improving inventory and customer service levels. The company continues to monitor the dynamic external environment, maintaining its fiscal 2025 guidance with expectations of a 2% decrease in organic net sales compared to fiscal 2024, an adjusted operating margin of approximately 14.4%, and adjusted EPS of around $2.35. Conagra aims for a free cash flow conversion of greater than 100%, indicating a strong cash flow position despite current challenges.