Conagra Brands, Inc. (NYSE:CAG) released its third-quarter results on Wednesday ahead of the market open, reporting earnings that came in slightly below expectations while revenue edged past analyst forecasts.
The company posted adjusted earnings per share of $0.39, missing the consensus estimate of $0.40. Revenue reached $2.79 billion, slightly higher than the $2.76 billion analysts had anticipated. Conagra also tightened its full-year adjusted EPS outlook to around $1.70, the lower end of its earlier guidance range of $1.70 to $1.85.
Overall net sales declined 1.9% year over year, although organic net sales rose 2.4%, supported by a 1.9% increase in price and product mix and a 0.5% rise in volumes. The company pointed to continued strength in its Frozen and Snacks divisions, where it gained volume share in categories such as frozen single-serve meals, frozen vegetables, meat snacks, and hot cocoa.
The company reported an adjusted operating margin of 10.6% for the quarter and said it expects its full-year adjusted operating margin to land near the upper end of its 11.0% to 11.5% guidance range.
Shares of Conagra slipped 0.2% following the announcement.
“I am pleased with our third quarter performance as we returned the business to organic net sales growth, reflecting continued upward inflection in our Frozen and Snacks businesses while remaining on track in our cash businesses,” said Sean Connolly, president and chief executive officer.
Among its business segments, Refrigerated & Frozen delivered the strongest performance, with organic net sales rising 3.6%, driven by a 3.9% increase in volumes as the company regained market share following supply disruptions last year.
The Grocery & Snacks segment posted 1.8% organic net sales growth, while the Foodservice division reported a 3.6% increase.
Meanwhile, adjusted gross margin declined by 112 basis points to 23.7%, as stronger organic sales and operational efficiencies were offset by rising input costs. The company expects cost of goods sold inflation to reach roughly 7% for the full fiscal year, including the impact of tariffs.
Adjusted net income fell 22.3% to $188 million during the quarter.