Conagra Q1 FY2026 Results show lower reported sales and earnings with guidance reaffirmed.
The firm recorded a net sales of 2.63 billion, which declined 5.8 percent in comparison to the previous year. Organic net sales decreased 0.6%. The reported operating margin was 13.22 and adjusted operating margin was 11.8. Diluted EPS reported was 0.34 whereas adjusted was 0.39.
The net sales in Grocery and Snacks decreased 8.7 percent to $1.1 billion. Organic net sales fell 1.0%. The segment operating profit increased 5.0% to $262 million and the adjusted operating profit declined 12.9% to $221 million.
Refrigerated and Frozen net sales dropped 0.9 percent to 1.1 billion. The increase in organic net sales was 0.2 percent, volume was up 0.5% and price/mix declined 0.3%. Operating profit went down 35.8 to $113 million. Adjusted operating profit decreased by 28.1 to $114 million.
International net sales declined 18 percent to $212 million. Organic net sales decreased 3.5%. Operating profit rose 11.2 to $37 million and adjusted operating profit rose 5.3 to $38 million.
The net sales of foodservice went down by 0.8 per cent to 264 million. On higher price/mix and less volume, organic net sales grew by 0.2%. The operating profit and adjusted operating profit was reduced by 21.1 to $28 million.
The gross profit declined by 13.4 to 641 million. Adjusted gross profit dropped by 11.3 percent to $644 million. Gross margin had dropped to 24.3, and adjusted gross margin was 24.4. SG&A was $336 million, up 0.1%. Adjusted SG&A was $333 million, up 1.5%. The cost of advertising and promotion increased by 5.0, to $53 million.
Net interest expense was reduced 11.4 to 94 million. The mean diluted number of shares was 480 million. In the quarter, the company has paid a dividend of $0.35 per share.
Operation activities cash was 121 million. Capital was 147 million. Free cash flow was $(26) million. Net leverage ratio is 3.55x with net debt at the end of the quarter of $7.6 billion, which dropped 12.3% compared to the previous year.
Fiscal 2026 guidance was reinstated. The growth of organic net sales will be between (1)% and 1%. Adjusted operating margin should be in the range of 11.0 -11.5. Adjacent EPS will be between 1.70 and 1.85. Interest expense is now projected to be about 390 million and adjusted effective tax rate is projected to be about 24 percent in the fiscal year.
Other things like continued inflation of the cost of goods sold and tariffs are also included in the outlook factors. Guidance envisages core inflation rate of a little bit above 4% and tariff effects which are predicted to drive cost of goods sold up by about 3%/year. The inflation of total cost of goods sold is estimated to now fall in the low 7 percent bracket.
Conagra Q1 FY2026 Results also noted volume share gains in categories such as frozen desserts, refrigerated whipped topping, hot dogs, pudding, canned tomatoes, and frozen multi-serve meals.
