#Conagra Brands Reports Q3 Fiscal 2026 Results
Conagra Brands (NYSE: CAG) reported its third-quarter fiscal 2026 results on April 1, with net sales declining 1.9% year over year to $2.8 billion, while diluted earnings per share rose to $0.42.
The Chicago-based packaged food company said organic net sales increased 2.4% during the quarter, offset by declines related to divestitures and acquisitions. Volume rose modestly alongside price and mix improvements, according to the company’s earnings release.
The results reflect a mixed operating environment for consumer packaged goods companies, where pricing actions and portfolio changes continue to shape reported revenue trends amid ongoing cost pressures.
#Sales Trends and Profitability
Conagra reported gross profit of $658 million for the quarter, down 7.4% from the prior year period, as higher input costs and operating leverage weighed on margins. Gross margin declined to 23.6%.
Operating margin for the quarter was 10.0%, while adjusted operating margin was 10.6%. Selling, general, and administrative expenses decreased on a reported basis but increased on an adjusted basis, partly reflecting higher advertising and promotional spending.
Net income attributable to the company rose 37.7% to $200 million. However, adjusted net income declined compared with the prior year, primarily due to lower adjusted gross profit.
Adjusted EBITDA decreased 14.9% to $437 million, reflecting continued pressure from cost inflation and the impact of divested businesses.
#Segment Performance
Performance varied across Conagra’s business segments.
The Grocery & Snacks segment reported net sales of $1.2 billion, down 6.3% year over year, reflecting the impact of divestitures despite organic growth. Operating profit for the segment declined as cost inflation offset gains in pricing and productivity.
The Refrigerated & Frozen segment recorded net sales of $1.1 billion, up 1.6%, driven by a 3.9% increase in volume. The company attributed the improvement in part to recovery from prior-year supply constraints.
International net sales rose 1.3% to $227 million, supported by foreign exchange, though organic sales declined slightly. The Foodservice segment posted a 1.8% increase in net sales to $261 million.
Across segments, operating profit trends were generally affected by higher cost of goods sold and reduced contributions from divested operations.
#Cash Flow and Balance Sheet
For the first three quarters of fiscal 2026, Conagra reported operating cash flow of $896 million, down from $1.35 billion in the prior year period. Free cash flow totaled $581 million, a decline of 44.2% year over year.
The company ended the quarter with net debt of $7.3 billion, representing a reduction of approximately $818 million compared with the prior year. The net leverage ratio stood at 3.83x.
Dividends paid during the period totaled $502 million, unchanged from the prior year, and the company paid a quarterly dividend of $0.35 per share.
#Outlook and Cost Pressures
Conagra said it is narrowing its fiscal 2026 guidance ranges. The company expects organic net sales to be near the midpoint of a projected decline of 1% to growth of 1% compared with fiscal 2025.
Adjusted operating margin is expected near the high end of an approximately 11.0% to 11.5% range, while adjusted earnings per share are projected to be about $1.70, at the lower end of the previously issued range.
The company also revised expectations for adjusted equity earnings and interest expense. It now anticipates approximately $140 million in adjusted equity earnings and about $385 million in interest expense for the full fiscal year.
Conagra noted that cost of goods sold inflation is expected to remain elevated at around 7% for fiscal 2026, including the effects of tariffs before mitigation actions.
#Industry Context and Forward Considerations
The company’s results come as food manufacturers continue to navigate input cost volatility, shifting consumer demand, and pricing sensitivity across categories. Volume growth in certain frozen and snack categories suggests stabilization in some segments, while margin pressures persist across the sector.
Management indicated that forward-looking expectations remain subject to factors including inflation, foreign exchange movements, and portfolio changes such as acquisitions and divestitures. These elements may affect comparability and financial outcomes in future periods.
As with other packaged food companies, Conagra’s performance may depend on its ability to balance pricing strategies with consumer demand while managing supply chain and cost dynamics.