Conagra Brands Slumps to 13-Year Low After Weak Q4 and Guidance Miss

Conagra Brands (CAG) kicked off consumer staple earnings season with disappointing fourth-quarter results and a cautious fiscal 2026 outlook that sent shares tumbling to their lowest level since 2012. The packaged-food giant—known for brands like Slim Jim,

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For the fiscal fourth quarter,

CEO Sean Connolly attributed the softness to a difficult operating environment, citing elevated inflation, supply constraints, and foreign exchange headwinds. But the biggest concern for investors appeared to be the forward guidance. For fiscal 2026, Conagra expects adjusted EPS of $1.70–$1.85, well below analyst expectations of $2.19. The company also forecast organic net sales growth between -1% and +1% and an adjusted operating margin in the 11%–11.5% range, implying further pressure on profitability.

Much of the margin risk stems from newly announced U.S. tariffs, which Conagra says could raise its cost of goods sold by about 3% annually. The company has baked into guidance a 50% tariff rate on imported tin plate steel and aluminum, a 30% tariff on certain Chinese imports, and a 10% reciprocal rate on imports from other nations. Management is pursuing mitigation strategies, including supply chain adjustments, sourcing shifts, and cost-cutting initiatives, but acknowledged the magnitude of the tariff-related cost headwind.

Segment-level results underscored the breadth of the challenge. Grocery & Snacks revenue fell 2.1%, with adjusted operating profit down 11.7%. The Refrigerated & Frozen unit saw sales drop 4.4% and adjusted operating profit slide 10.1%. Foodservice sales fell 4%, while International revenues plummeted nearly 14%, weighed down by both foreign exchange and recent divestitures. Only the International segment managed to grow operating profit year-over-year, thanks to aggressive SG&A reductions and productivity gains.

Despite the weak finish to fiscal 2025, management pointed to early signs of progress in areas such as market share recovery and domestic volume stabilization. During the quarter, Conagra gained share in frozen desserts, microwave popcorn, and refrigerated whipped toppings. The company also saw encouraging trends in its Ardent Mills joint venture, where equity earnings rose 31% on stronger commodity performance. That said, full-year adjusted EPS still declined 13.9%, while organic sales fell 2.9%—not the kind of momentum investors want heading into a year of elevated macro uncertainty.

Connolly tried to strike an optimistic tone for FY26, reaffirming the company’s strategic focus on its frozen and snacks portfolio, cost discipline, and cash flow generation. Free cash flow for FY25 totaled $1.3 billion, with a forecast for continued strength in FY26 and a dividend maintained at $0.35 per share quarterly. Capex is expected to increase modestly to $450 million, with an emphasis on enhancing supply chain resiliency and product innovation.

Still, the near-term setup is tough. Consumer staples as a group have underperformed the broader market in 2025, with investors increasingly skeptical about the pricing power and margin sustainability of packaged food makers. Conagra’s guidance—especially its margin outlook—likely adds to those concerns. The company's exposure to volatile input costs, tariff risk, and soft volume growth presents a complex puzzle, particularly when household budgets remain stretched and private-label competition intensifies.

Looking ahead, investors should focus on whether Conagra can execute on its cost mitigation plan, sustain share gains in core categories, and navigate its way through tariff and FX pressures. Peer names like

For now, though,