Conagra Brands, Inc. (NYSE:CAG) saw its stock rise approximately 2.1% in premarket trading Wednesday after reporting first-quarter fiscal 2026 results that beat analyst forecasts, despite ongoing challenges from inflation and cautious consumer demand.
The Chicago-based food company posted adjusted earnings per share of $0.39 for the quarter ending August 24, exceeding the expected $0.33 by $0.06. Revenue totaled $2.63 billion, slightly above the consensus estimate of $2.62 billion, though down 5.8% compared with the same period last year. Organic net sales decreased 0.6% year-on-year.
“I am pleased by the solid progress we made in the first quarter with top line improvement and continued strategic execution across our portfolio,” said Sean Connolly, president and CEO of Conagra Brands. “We successfully delivered on key supply chain objectives, fully restored service levels, and advanced our portfolio reshaping which enabled us to further reduce net debt.”
The company reaffirmed its fiscal 2026 outlook, projecting organic net sales growth between -1% and 1% compared to fiscal 2025, adjusted operating margin around 11.0% to 11.5%, and adjusted EPS between $1.70 and $1.85, in line with analyst expectations of $1.78.
Conagra’s gross margin fell 212 basis points to 24.3% during the quarter as productivity gains were offset by higher costs and lost profits from divested businesses. The company expects cost of goods sold inflation to remain elevated in fiscal 2026, with core inflation slightly above 4%.
The company also highlighted a 12.3% reduction in net debt compared with the prior year, bringing the total to $7.6 billion and a net leverage ratio of 3.55x at the quarter’s end.
During the quarter, Conagra gained market share in several categories, including frozen desserts, refrigerated whipped toppings, hot dogs, pudding, canned tomatoes, and multi-serve frozen meals.
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