Conagra Brands reports profit rise despite lower sales in Q1FY2027
Reported net sales decreased 1.4%; organic net sales decreased 1.1%.
USA – Conagra Brands has reported a mixed start to fiscal 2027, with first-quarter net sales declining 1.4% to US$2.6 billion while profitability improved, as the food manufacturer continued efforts to restore margins, reduce complexity and strengthen its portfolio.
The results cover the 13 weeks ended August 30, 2026, compared with the same period of the previous fiscal year.
Organic net sales declined 1.1%, reflecting a 2.1% volume decline partly offset by a 1.0% positive impact from price and product mix.
Conagra said it gained dollar share in several categories, including frozen vegetables, pudding, chili, frozen breakfast, hot dogs and frozen desserts.
Gross profit, however, fell 3.4% to US$619 million as lower sales, cost inflation and unfavorable operating leverage outweighed productivity gains and approximately US$4 million in tariff refunds.
Despite the pressure on sales and gross profit, Conagra delivered higher earnings. Net income increased 6% to US$174 million, or US$0.36 per diluted share, up from US$165 million, or US$0.34 per share, a year earlier.
Adjusted earnings per share rose 5.1% to US$0.41, while adjusted EBITDA increased 2.4% to US$451 million.
The company attributed the improvement primarily to lower adjusted selling, general and administrative expenses and higher equity earnings.
Performance varied across Conagra’s business segments. Grocery & Snacks sales declined 2.6% to US$1.1 billion, while Refrigerated & Frozen sales fell 2.1% to approximately US$1.05 billion.
In contrast, International sales increased 2.7% to US$218 million, supported by a 0.9% increase in organic sales. Foodservice delivered stronger growth, with sales rising 3.2% to US$273 million and organic sales increasing 3.3%, driven by higher prices and a 2.5% increase in volume.
Conagra also continued to reduce its debt burden during the quarter. Net debt stood at US$7.4 billion at period-end, a US$193 million, or 2.5%, reduction from the prior-year period.
However, operating cash flow was negative US$4 million, compared with US$121 million generated a year earlier, while capital expenditure declined to US$124 million from US$147 million.
The company reaffirmed its fiscal 2027 outlook, forecasting organic net sales to decline between 1% and 3%. Adjusted operating margin is expected at 10% to 10.5%, while adjusted earnings per share are projected between US$1.40 and US$1.50.
Chief Executive Officer John Brase said the company remained focused on restoring margins, increasing investment, reducing complexity and rebalancing capital allocation as it navigates a challenging operating environment.
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