Conagra Brands (CAG) Q2 2025 Financial Results Summary
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Conagra Brands (CAG) Q2 2026 Financial Results Summary
On December 19, 2025, Conagra Brands, Inc. (NYSE: CAG) reported its financial results for the second quarter of the fiscal year 2026, which concluded on November 23, 2025. Here’s a detailed summary of the key highlights and financial metrics.
Financial Highlights:
- Net Sales: Decreased 6.8% to $2.98 billion; organic net sales fell 3.0%.
- Operating Margin:
- Reported operating margin at (20.1)%.
- Adjusted operating margin stood at 11.3%.
- Diluted Loss Per Share: Recorded at $1.39, influenced primarily by non-cash impairment charges; compared to adjusted EPS of $0.45.
Company Guidance:
- Fiscal 2026 Guidance Reaffirmation:
- Expecting organic net sales change of (1)% to 1% vs. fiscal 2025.
- Adjusted operating margin anticipated between ~11.0% and ~11.5%.
- Adjusted EPS forecasted to be between $1.70 and $1.85.
Total Company Q2 Results Breakdown:
- Net Sales: Decreased 6.8%, impacted by:
- 3.9% due to M&A activity.
- 3.0% decrease in organic net sales.
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Partial offset from a 0.1% positive contribution from foreign exchange.
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Gross Profit: Fell 17.8% to $696 million; adjusted gross profit down 17.1% to $698 million.
- Gross Margin:
- Reported gross margin decreased 313 basis points to 23.4%.
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Adjusted gross margin decreased 292 basis points to 23.4%.
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SG&A Expenses:
- Decreased 23.6% to $325 million.
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Adjusted SG&A (including A&P) increased by 2.9% to $362 million; A&P increased 7.2% to $74 million.
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Net Interest Expense: Decreased 11.2% to $96 million driven by lower net debt.
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Cash Flow: Generated $331 million in net operating cash flow (down 56.1% from the same quarter last year).
Segment Performance:
- Grocery & Snacks: Sales down 8.5% to $1.2 billion; organic sales down 1.5%.
- Refrigerated & Frozen: Sales decreased 6.5% to $1.3 billion; organic sales down 5.1%.
- International: Sales fell 5.4% to $230 million; organic sales down 2.9%.
- Foodservice: Sales decreased 1.3% to $288 million; nevertheless, organic sales increased 0.2%.
Other Notable Metrics:
- Net Loss: Total net loss attributable to Conagra Brands was $664 million.
- Adjusted EBITDA: Decreased 25.2% to $478 million.
- Dividend: The company declared a dividend of $0.35 per share, unchanged from the previous year.
Debt and Cash Flow Update:
- Total net debt at the end of the quarter was $7.6 billion, representing a 10.1% decrease year-over-year.
- Net leverage ratio was 3.83x at quarter-end.
Outlook:
- Conagra Brands remains focused on navigating a challenging consumer environment with plans to drive organic net sales growth through innovations, increased merchandising investments, and managing costs amid pressures from inflation and tariffs.
- The company anticipates continuing cost inflation challenges, with expected total cost of goods sold inflation around 7% for fiscal 2026.
In summary, Conagra Brands faced significant challenges in the second quarter, with net sales and profitability impacted by various factors, including market conditions and operational adjustments. The reaffirmation of guidance indicates management’s cautious optimism for the remainder of the fiscal year.
Consolidated Statements of Operations (in millions)
| SECOND QUARTER | Percent Change | ||
|---|---|---|---|
| Thirteen Weeks Ended | Thirteen Weeks Ended | ||
| November 23, 2025 | November 24, 2024 | ||
| Net sales | $2,979.1 | $3,195.1 | (6.8)% |
| Cost of goods sold | $2,283.1 | $2,348.4 | (2.8)% |
| Gross profit | $696.0 | $846.7 | (17.8)% |
| Selling, general and administrative expenses | $325.1 | $425.2 | (23.6)% |
| Goodwill impairment charges | $771.3 | $— | 100.0% |
| Other intangible asset impairment charges | $197.0 | $18.9 | 943.9% |
| Loss on divestitures | $0.2 | $— | 100.0% |
| Operating profit (loss) | -$597.6 | $402.6 | N/A |
| Pension and postretirement non-service income | $6.1 | $3.1 | 99.2% |
| Interest expense, net | $96.0 | $108.2 | (11.2)% |
| Equity method investment earnings | $32.2 | $48.5 | (33.5)% |
| Income (loss) before income taxes | -$655.3 | $346.0 | N/A |
| Income tax expense | $8.3 | $61.5 | (86.4)% |
| Net income (loss) attributable to Conagra Brands, Inc. | -$663.6 | $284.5 | N/A |
| Earnings (loss) per share – basic | -$1.39 | $0.60 | N/A |
| Basic weighted average shares outstanding | 479.0 | 478.0 | 0.2% |
| Earnings (loss) per share – diluted | -$1.39 | $0.59 | N/A |
| Diluted weighted average shares outstanding | 479.0 | 479.3 | 0.0% |
Consolidated Balance Sheets (in millions)
| November 23, 2025 | May 25, 2025 | |
|---|---|---|
| ASSETS | ||
| Current assets | ||
| Cash and cash equivalents | $46.6 | $68.0 |
| Receivables, less allowance for doubtful | $835.5 | $770.0 |
| accounts of $4.3 and $3.6 | ||
| Inventories | $2,199.8 | $2,048.3 |
| Prepaid expenses and other current assets | $144.4 | $90.6 |
| Current assets held for sale | $— | $94.1 |
| Total current assets | $3,226.3 | $3,071.0 |
| Property, plant and equipment, net | $2,801.7 | $2,835.9 |
| Goodwill | $9,729.4 | $10,501.9 |
| Brands, trademarks and other intangibles, net | $2,202.3 | $2,421.1 |
| Other assets | $1,576.2 | $1,571.0 |
| Noncurrent assets held for sale | $4.4 | $533.0 |
| $19,540.3 | $20,933.9 | |
| LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
| Current liabilities | ||
| Notes payable | $388.0 | $804.7 |
| Current installments of long-term debt | $776.9 | $1,028.8 |
| Accounts and other payables | $1,526.9 | $1,590.1 |
| Accrued payroll | $128.5 | $146.0 |
| Other accrued liabilities | $799.4 | $744.7 |
| Current liabilities held for sale | $— | $2.7 |
| Total current liabilities | $3,619.7 | $4,317.0 |
| Senior long-term debt, excluding current | $6,459.0 | $6,234.1 |
| installments | ||
| Deferred income taxes | $784.0 | $810.3 |
| Other noncurrent liabilities | $586.8 | $639.6 |
| Noncurrent liabilities held for sale | $— | $0.2 |
| Total stockholders’ equity | $8,090.8 | $8,932.7 |
| $19,540.3 | $20,933.9 |