Conagra Brands Q2 2025 Earnings: Navigating Inflation and Market Challenges

Conagra Brands, Inc. (NYSE: CAG) recently reported its second-quarter fiscal 2025 earnings, providing insights into the company's performance and outlook amidst a challenging consumer landscape. Despite strategic investments driving market share gains, Conagra faced headwinds from inflation and foreign exchange rates, leading to a revision in its fiscal 2025 guidance.

Conagra's adjusted EPS of 70 cents beat estimates by 2 cents, although it declined 1.3% year over year due to reduced gross profit and higher SG&A costs. Net sales of $3,195.1 million also beat estimates, but fell 0.4% year over year, driven by adverse currency movements and an unfavorable impact of M&A, partly offset by a slight increase in organic net sales.

The company's strategic investments have led to volume share gains in key categories such as microwave popcorn, shelf-stable dinners and entrees, chili, and seeds. However, higher-than-expected inflation and adverse foreign exchange rates impacted performance, leading to a revision in fiscal 2025 guidance. Conagra now expects organic net sales growth to be close to the midpoint of the previously guided range of a decline of 1.5% to flat. The adjusted operating margin is expected to be about 14.8%, down from the earlier range of 15.6%-15.8%. Management expects adjusted EPS in the range of $2.45-$2.50, a significant reduction from the prior view of $2.60-$2.65.

Conagra's segmental performance was mixed, with the Grocery & Snacks segment reporting a 2% year-over-year increase in net sales, driven by a 0.8% positive impact of M&A and a 1.2% organic sales rise. The Refrigerated & Frozen segment's net sales and organic sales were flat year over year, with a 1.9% decline in price/mix offset by a 1.9% increase in volumes. Despite these gains, the Refrigerated & Frozen segment's operating profit declined 53.4%, highlighting operational challenges.

Conagra's revised fiscal 2025 guidance reflects a more challenging outlook, with greater-than-expected inflation and adverse foreign exchange rates impacting its financial performance. Despite these headwinds, Conagra's guidance indicates a commitment to maintaining growth momentum, albeit at a slower pace than initially anticipated. Investors should closely monitor the company's progress in navigating these challenges and its ability to capitalize on strategic investments and market share gains.



In conclusion, Conagra Brands' Q2 2025 earnings call highlighted the company's ability to drive market share gains through strategic investments while facing headwinds from inflation and foreign exchange rates. The revised fiscal 2025 guidance reflects a more challenging outlook, but Conagra remains committed to maintaining growth momentum. Investors should closely monitor the company's progress in navigating these challenges and its ability to capitalize on its strategic investments.