Conagra Brands reports Q2 results  

USA – Conagra Brands, Inc., the Chicago-headquartered CPG giant behind Birds Eye, Healthy Choice, Marie Callender’s, and Slim Jim, released fiscal 2026 second-quarter results on December 19, 2025, revealing persistent volume pressures offset by margin discipline amid macroeconomic headwinds.   

Net sales declined 6.8% to US$3.0 billion, driven by 3.9% divestiture impact, 3.0% organic sales drop from flat price/mix and 3% volume contraction, and favorable 0.1% FX tailwind.   

Adjusted EPS of US$0.45 slightly beat consensus estimates of US$0.44, while gross margins contracted 313 basis points to 23.4%, reflecting input cost inflation outpacing productivity.   

The quarter ending November 23, 2025, showcased segment resilience despite retailer inventory normalization and pantry-loading normalization post-inflation.   

Gross profit contracted by 17.8% to US$696 million, reflecting higher input costs and weaker volumes.   

The company reported an operating loss of US$598 million, a sharp deterioration from the prior year, primarily driven by non-cash goodwill and brand impairment charges.  

On the bottom line, Conagra posted a net loss of US$664 million, translating to a diluted loss per share of US$1.39.   

Despite the challenging quarter, Conagra reaffirmed its fiscal 2026 guidance, projecting Organic net sales growth of -1% to +1% compared to fiscal 2025, an adjusted operating margin of 11.0% to 11.5%, and adjusted EPS of US$1.70 to US$1.85.  

Sean Connolly, president and chief executive officer of Conagra Brands, commented, “As we look ahead to the second half, we are well positioned to return to organic net sales growth supported by a robust innovation pipeline, increased merchandising and A&P investment, and a resilient supply chain. While the macro environment remains dynamic, our active management and focused execution give us confidence in our path forward.”  

Selling, general, and administrative expense (SG&A), which includes advertising and promotional expense (A&P), decreased 23.6% to US$325 million in the quarter, while adjusted SG&A, which provides for A&P, increased 2.9% to US$362 million.   

A&P increased 7.2% to US$74 million compared to the prior year period.    

In the quarter, the company incurred US$968 million in non-cash goodwill and brand impairment charges, primarily driven by a sustained decline in its share price and market capitalization.  

Net interest expense was US$96 million; an 11.2% decrease compared to the prior year period, driven by a reduction in net debt.  

Outlook   

The company now expects its adjusted equity earnings to be approximately US$170 million for the fiscal year, down from its prior estimate of approximately US$200 million.  

As noted above, the company expects inflation in the cost of goods sold to remain elevated in fiscal 2026. Guidance anticipates core inflation slightly higher than 4%.   

In addition, the company expects an impact on fiscal 2026 from previously announced US tariffs.  

Combined, these tariffs are expected to increase the cost of goods sold by approximately 3% annually, before mitigating actions, including accelerated cost-savings initiatives, sourcing alternatives, and targeted pricing actions.   

Taken together, the company expects the total cost of goods sold inflation to be approximately 7%.  

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