ConAgra Brands misses Q1 estimates, reaffirms full-year outlook

ConAgra Brands (CAG) reported its first-quarter fiscal 2025 on Wednesday, falling short of analyst expectations as the food company faced challenges from inflation and temporary manufacturing disruptions.

The stock dropped 3% following the earnings release.

The Chicago-based business reported adjusted earnings per share of $0.53, missing the analysts' consensus of $0.59. Revenue came in at $2.79 billion, below estimates of $2.84 billion and down 3.8% YoY. Organic net sales decreased 3.5%.

ConAgra cited temporary manufacturing disruptions during the key grilling season, which it estimates impacted quarterly results by approximately $27 million. The company also faced headwinds from cost inflation and unfavorable operating leverage.

"Our team executed well to deliver on key priorities across the business during the first quarter in what continued to be a challenging environment," said Sean Connolly, President and CEO of ConAgra Brands.

Despite the Q1 miss, ConAgra reaffirmed its full-year fiscal 2025 guidance. The company expects organic net sales between -1.5% to flat compared to fiscal 2024, adjusted operating margin of 15.6% to 15.8%, and adjusted EPS of $2.60 to $2.65.

Gross margin decreased 189 basis points to 26.5% in the quarter. The company's Refrigerated & Frozen segment saw the largest decline, with operating profit down 11.6% to $176 million.

ConAgra noted it gained market share across several categories, including microwave popcorn, seeds, pudding, and pickles. The company ended the quarter with a net leverage ratio of 3.60x, down from the prior year.

Source: Investing.com