Conagra Brands (NYSE:CAG) shares fell 3.2% in premarket trading after the packaged food company issued a weaker-than-expected earnings outlook for fiscal 2027, overshadowing fourth-quarter results that narrowly exceeded Wall Street forecasts.
Fourth-quarter results edge past expectations
For the quarter ended 31 May 2026, Conagra reported adjusted earnings per share of 0.47 dollars, slightly above analysts’ consensus estimate of 0.46 dollars.
Revenue increased 3.6% year on year to 2.9 billion dollars, marginally ahead of the expected 2.89 billion dollars.
Organic net sales were broadly unchanged, as a 1.6% improvement from pricing and product mix was offset by a 1.6% decline in sales volumes.
Outlook falls short of forecasts
Investor sentiment weakened after Conagra forecast adjusted earnings per share of between 1.40 and 1.50 dollars for fiscal 2027.
The midpoint of 1.45 dollars came in well below analysts’ consensus estimate of 1.70 dollars.
The company also expects organic net sales to decline by between 1% and 3% during the year, while adjusted operating margin is projected to be between 10.0% and 10.5%.
In addition, Conagra announced a reduction in its annual dividend to 0.70 dollars per share.
CEO highlights resilient performance
President and Chief Executive Officer John Brase said:
“In fiscal 2026, our team delivered results within our guidance ranges, navigating a dynamic operating environment while demonstrating the resilience of our business and disciplined execution across the organization.”
Impairment charges lead to quarterly loss
For the full 2026 financial year, adjusted earnings per share totalled 1.72 dollars.
Net sales declined 2.9% to 11.3 billion dollars, while organic net sales slipped 0.4%.
Adjusted operating margin decreased to 11.3% as productivity improvements were offset by higher costs and weaker operating leverage.
The company reported a fourth-quarter net loss of 1.6 billion dollars, or 3.37 dollars per diluted share, primarily due to 2.0 billion dollars in non-cash goodwill and brand impairment charges linked to the prolonged decline in its share price and market capitalisation.
Despite the loss, Conagra generated 979 million dollars in free cash flow during fiscal 2026 and reduced net debt by 11.9% to 7.1 billion dollars.
Conagra Brands stock price
