Conagra Brands Share Price Falls 3% Following Downbeat Annual Profit Outlook Amid Rising Costs

Conagra Brands Reports Disappointing Q3 Results Amid Turbulent Macro Landscape

Shares of Conagra Brands took a hit on Wednesday, dropping around 3% following the release of the company's third-quarter financial results. The manufacturer of Hunt's ketchup indicated that annual profits would likely settle at the bottom of its projected range, citing sustained high costs within a turbulent macroeconomic landscape.

The ongoing conflict in Iran has intensified these economic pressures, inflating expenses for food producers who were already struggling with rising input prices and shifting consumer dietary habits. To counter the increased costs of ingredients like palm oil, cocoa, and olive oil — alongside tin-plate steel tariffs — Conagra had implemented price hikes. During the third quarter, prices saw an uptick of 1.9%.

Stock Market Reaction

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At 1:26 p.m. EDT, Conagra Brands stock was trading at $15.55, down by $0.18, or 1.11%. It was around 3% lower in early trading. So far this year, the stock is down more than 10%.

The firm anticipates an annual adjusted profit of $1.70 per share, representing the lowest end of its earlier $1.70 to $1.85 guidance. Furthermore, Conagra expects costs to remain high through fiscal 2026, projecting inflation of approximately 7% (including tariffs) prior to any mitigation efforts. Annual net sales are expected to hit the midpoint of its previous forecast, which ranged from a 1% decrease to a 1% increase.

Conagra's quarterly revenue fell 1.9% to $2.79 billion, slightly exceeding analyst expectations of $2.76 billion. However, adjusted earnings of 39 cents per share fell just one cent short of estimates. Despite this, the company achieved organic sales growth of 2.4%, which Jefferies analysts attributed to a rebound from previous supply-chain issues and retailer inventory shifts.

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Conagra's reported net sales saw a 1.9% year-over-year decline, though organic net sales grew by 2.4%. This growth was fueled by a 1.9% improvement in price/mix and a 0.5% increase in volume. The Refrigerated & Frozen division delivered the most robust results, with organic net sales climbing 3.6%. This was supported by a 3.9% rise in volume, signaling a recovery in market share after previous supply chain limitations.

While competitor General Mills recently maintained its annual targets, Campbell Soup Co. has lowered its sales and profit outlooks.