Key facts
- Conagra Brands forecast fiscal 2027 adjusted profit between $1.40 and $1.50 per share, below analysts' estimates of $1.59.
- The company expects fiscal 2025 organic sales to decrease between 1.5% and flat.
- Conagra Brands reported fourth-quarter net sales of $2.91 billion, missing estimates.
- Elevated commodity costs and cautious consumer spending are impacting the company's business.
- Conagra Brands cut its dividend.
Conagra Brands has forecast its annual profit and revenue to fall below Wall Street estimates, signaling ongoing pressure from high commodity costs and cautious consumer spending. The company also announced a dividend cut, leading to a decline in its shares in premarket trading.
For fiscal year 2027, Conagra Brands expects adjusted profit to be between $1.40 and $1.50 per share, falling short of the $1.59 per share estimated by analysts. The company also anticipates an annual organic net sales decline of 1% to 3%, compared to a 0.4% decline in fiscal 2026. For fiscal year 2025, organic sales are projected to decrease between 1.5% and flat, contrasting with analysts' expectations of a 1.54% rise.
In the fourth quarter ending May 26, Conagra Brands reported net sales of $2.91 billion, missing analysts' average estimates of $2.93 billion. The company's total volumes decreased by 1.8% in the fourth quarter, following a 7.7% drop last year. CEO Sean Connolly expressed optimism that challenging industry trends would gradually wane as consumers adapt to new price points.
Analysts note that national food brands like Conagra face difficulties as consumers adopt budget-friendly habits that are unlikely to revert quickly even if inflation stabilizes. The company has attempted to attract cautious spenders by reducing product prices, but this has not fully offset sluggish demand in its frozen food and snacking businesses.